Lockdown extension will disappoint markets; Nifty may re-test 7,500 levels

The economy, one must understand, is not a light switch. One cannot just push the on and off button at will. It takes time for the economic activity to revive

The markets were expecting the lockdown to enter the fourth phase, but were hoping for more relaxations. However, the onus is now on the state governments, who will decide on the red, orange and green zones. That said, major production centres are outside major metros. As far as manufacturing is concerned, will are still not back at the pre-Covid-19 levels. So, the index of industrial production (IIP) will continue to suffer if only parts of India are open for business/manufacturing. The gauge for services production will also continue to suffer.

As regards the government’s stimulus measures, I feel that the