The big stories of the coming week – in charts

India's composite PMI for June will be released on Tuesday (Photo: Reuters)
India's composite PMI for June will be released on Tuesday (Photo: Reuters)


Also, health authorities and the general public will be closely watching the covid curve this week, as cases have surged lately.

Every Monday, Mint’s Plain Facts section features key data releases and events to look for in the coming week. Health authorities and the general public will be closely watching the covid curve this week, as cases have surged lately. The oldest democracy of the world, the US, will be celebrating its independence day amid a tense political atmosphere. With Tata Consultancy Services (TCS) set to announce its June-quarter results, the earning season will also begin this week. Here’s more:

1. Covid updates

New covid-19 cases in India have been seeing a steady uptick for a fortnight now, with the country clocking over 18,000 new cases on Friday. This is the highest count since 20 February this year, according to official data. While the government is looking at the possibility of a new variant or sub-variant behind the rise, the threat of a severe covid wave hasn’t emerged yet. States such as Karnataka and Jharkhand have re-introduced mandatory masking.

Meanwhile, the union health ministry wrote to states last week asking them to improve vaccination coverage. All healthcare facilities have also been asked to report ‘influenza-like illness’ (ILI) cases, and 5% of such cases would be tested through RT-PCR. Moreover, 2% of international passengers entering India will be screened at random. The coming months will see a raft of festivals that could lead to gatherings and travel, which will need vigilance from the general public.

2. US Independence Day

The US celebrates its 247th Independence Day on Monday to commemorate the 1776 Declaration of Independence. However, this day comes at a time when it is standing at a crossroads, with liberal principles frequently clashing with the conservative worldview.

On 24 June, millions of US women lost the constitutional protection for the right to abortion when the Supreme Court struck down a 49-year-old ruling, triggering massive protests by women’s rights groups. Abortion is not the only divisive issue in US politics: similar recent rulings on gun ownership and emissions control are deeply rooted in conflicting ideas of freedom that the US must contend with to retain its relevance as a global superpower.

While Americans remain optimistic about the country’s future, over six in 10 adults are not happy with the way its democracy is functioning, according to a 2021 Pew Research survey. The level of dissatisfaction is among the highest in advanced economies.

3. TCS earnings

TCS, the biggest Indian IT company, will kickstart the earnings season, reporting its June-quarter results on Friday. The company has been on a steady recovery path for the last few quarters since the meltdown in 2020. With the risk of the US slipping into a recession, the macro scenario has once again turned gloomy. However, against the slump of 25% in the BSE IT index since January, TCS’s slide of less than 15% shows its resilience compared to others.

The company will likely report strong revenue growth in the June quarter, but profits may slightly decline owing to high retention and travel cost, analysts said.

IT services companies may take a hit in the subsequent quarters. With the slowdown, enterprises may cut down their expenses, including technology spending. However, some analysts are concerned about a slowdown in the IT sector only next year, not this year. The biggies like TCS will be shielded against uncertainty to a large extent thanks to their multi-year deals.

4. India PMI

India's composite PMI for June will be released on Tuesday. The data in May indicated the fastest pace of expansion since November last year, led by business activity in the services sector, which rose at its fastest rate since April 2011. The services sector’s PMI had jumped from 57.9 in April to 58.9 in May. A reading above 50 denotes month-on-month expansion in activity.

Although the index has improved in recent months, price pressures continue to be a drag. A worsening inflation outlook caused service sector input costs to climb in May at the fastest rate in the PMI survey’s history. The manufacturing PMI, reported last week, showed that while it grew, it dipped from May's level due to price pressures.

S&P Global, the agency that releases the data, noted that there was a broad-based slowdown in growth across a number of measures in June's manufacturing index as clients and businesses restricted spending in the face of elevated inflation.

5. Adani-Holcim deal

The open offer by India’s Adani Group to Holcim’s Ambuja Cements and ACC Limited will begin on Wednesday and end on 19 July. An open offer is where a company that is getting acquired gives its existing shareholders the option to purchase new shares at a discount to the market price.

The deal struck between Adani Group and Holcim to acquire its India companies, Ambuja Cements and ACC Limited, is set to be one of the biggest M&A deals in terms of value in the Indian cement industry.

The independent directors of both companies will publish their recommendations to the shareholders of both companies by Monday. With a combined investment of 31,139 crore, these two open offers could be the largest in corporate Indian history. Analysts at Nirmal Bang call this transaction remarkable due to the size of the transaction as well as the valuations at which it occurred.

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