Newsletter
If there’s one thing markets hate, it’s uncertainty.
Trump’s arbitrary tariff plan sent shockwaves through U.S. markets. By mid-day, the S&P 500 had fallen over 4%, while the Nasdaq was down nearly 5%.
Country-specific indices took an even bigger hit. Markets like Vietnam were hammered, as investors priced in the impact of the proposed 46% tariff rate.
Single stocks were hit pretty bad too. Apple was down over 6%. Nike, which employs 4.5L people in factories in Vietnam, lost nearly 15%.
What’s next: while it’s debatable whether Trump will maintain such high rates in the long run, he’s set a lofty benchmark—one he can now use as leverage in negotiations. Rumors suggest that countries like South Korea, Vietnam, and others are already at the table.
China and the EU, meanwhile, struck a different tone. China announced plans to prepare a comprehensive response, and Europe is already working on countermeasures.
India, surprisingly, may be relatively better positioned. With tariffs at 26%, India’s rate structure appears more favorable compared to its Asian peers — a nod to the GOI’s tactful handling of the Trump challenge. While this still impacts Indian exporters, we might be in a position to absorb some of the business lost by Bangladesh, Sri Lanka, China, and even Vietnam in the short term.
The Nifty and Sensex holding relatively steady could be a sign that the markets agree with us.
Meanwhile, pharma in India was crushing it. The US tariff regime will exempt pharmaceutical products, triggering a sharp relief rally. Nifty Pharma jumped, with Gland Pharma, Aurobindo, Dr. Reddy’s, and Sun Pharma gaining as much as 15%.
