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The vaccine bet - Long outdoors, short indoors

Disclaimer - This is not an investment recommendation. Please conduct your own diligence/consult an investment advisor before taking a position in the market.

Pharma giant Pfizer came out with an announcement earlier today, on their vaccine for COVID 19. The vaccine is 90% effective in preventing infections in the ongoing phase 3 trials. Markets across the globe rejoiced, although some sectors performed better than others. In today's post, we try to analyze the early trends post the announcement.

The trends that emerge from the early market movements in the US Markets indicate that the markets are showing a fair bit of confidence in the vaccine to take life back to normal - the result, the beaten down stocks that dealt with people moving outdoors have zoomed (Boeing, Airlines, Amusement Parks, Ticketing firms, and ofcourse Pfizer!). All stocks that were betting on more people staying indoors, including Zoom, Netflix, Spotify, as well as health companies like Peleton and gaming companies like EA and Activision bore the brunt.

So what does this mean for Indian stocks tomorrow?

The thesis and its beneficiaries are fairly easy to spot, and the markets in the short term are likely to reflect a similar story back in India, with Airlines, Movie theaters, Shopping plays, Hotels, Power and Crude plays and the like likely to rise. The broader index is also expected to rise along with it, driven by a positive global sentiment, and moves in important constituents.

(PS: We've analyzed Indigo (India's largest airline), GAIL (India's largest gas distributor), Powergrid (India's largest electricity distributor) in the past, and are analyzing PVR(total coincidence!) this week. You can read our indepth analysis of all these firm here)


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