Business resumption activities, which had been gathering pace after the end of the second wave, moderated for the week ended July 25, Japanese brokerage Nomura said on Monday.
The Nomura India Business Resumption Index declined to 95.3 from the previous week's high of 96.4, the brokerage said, stressing that it continues to be above the pre-second wave levels.
Mobility indices registered the first week-on-week fall since mid-May, with Google's workplace and retail and recreation mobility down 0.4 percentage points (pp) and 0.6 pp, respectively. The Apple driving index slipped 2.3 pp, it said.
Power demand also fell by a steep 4.1 per cent as compared to the preceding week, after a 2.8 per cent decline the previous week. The labour participation rate, however, rose to 41.1 per cent from 40.4 per cent.
It further said early macroeconomic data for June suggests a return to conditions similar to April, after the shallow decline in May. This supports its view that the sequential drop in June quarter GDP growth will be much less than consensus expectation, Nomura added.
However, mobility, railway freight revenues and GST e-way bill data suggest some stagnancy in July, even as the trade sector remains strong, it added.
The Japanese brokerage said pace of vaccination has stagnated with only 37 lakh vaccines being rendered per day in July. Even though it estimates vaccination to gather pace in August, the recent dip suggests that there will be a delay in overall targets.
With pandemic cases plateauing at an elevated level of 39,000 new cases per day, susceptibility to a third wave remains a key growth risk, it said.
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