Chris Wood suggests investors to use dip to increase allocation to cyclical sectors

India recorded nearly 60,000 fresh coronavirus cases yesterday -- the highest in more than five months -- taking the nationwide COVID-19 tally to 1.18 crores, the Union Health Ministry said on Thursday. The active cases are back to the levels seen in the first week of December 2020. Active cases rise by 25,000, taking the tally to 4.21 lakh. The positivity rate has risen above 3.5 percent, while the recovery rate has slipped to 95.1 percent.

On the back of the rise in COVID-19 cases, Wood said that for the moment, February has marked a temporary peak in the post-Covid rebound in economic activity. However, he believes that the focus will soon shift to the US stimulus package.

“The focus will grow in coming weeks on the scale of the Biden administration’s pending infrastructure stimulus, which now could be as big as $3 trillion. Coming weeks will see growing discussion on the tactics employed to get this package through Congress as well as how much will be paid for by increased taxation,” he added.