Tag: Donald Trump Tariffs

‘Indian Investors Need Not Worry About Tariff War or Indo-Pak Tension’

By LokMarg

Jitendra Luthra, an investment advisor based in UP, says the Indian fundamentals are strong enough to absorb any untoward disruptive incident in the long run. His views:

I have a piece of advice for all stock market investors, big or small, who have been losing sleep ever since US President Donald Trump announced a new tariff regime: Trump himself is still not clear about the intensity and degree of the tariffs he wants to impose on a specific country. White House is still rejigging the figures. So allow the dust to settle down and do not press the panic button.

My second advice is: the recent military flare-up between India and Pakistan will have little impact on the Indian market, though there could be minor upheaval initially. It is the Pakistan Stock Exchange (PSX) which will find it difficult to recover from the shock caused by the conflict as well as its after-effects. Stock markets move not only based on sentiments but also on the fundamentals of its corresponding economy.

Coming back to US tariffs, it is becoming increasingly clear that the real cause of the stocks tanking was US posturing against China. Currently, the two economic giants have reached a trade deal. Those who resorted to panic selling when the tariffs and counter-tariffs were hovering around 250% may now be regretting their decision.

Mind you, even while stock exchanges around the world felt the heat of reciprocal tariffs as soon as they were announced, the Indian stock market was arguably the first exchange to recover and successfully erase a majority of its losses. This is also seconded by the observations of big wig market experts like Bloomberg which touted Indian markets as “relatively safe” amid global volatility over Trump’s punitive move on friends and foes alike.

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Reports have also lauded our markets for having a much better capacity to withstand a potential global recession at any point of time and any kind of unfavourable global economic conditions. According to other stats available widely, India is far better insulated from tariffs, accounting for only 2.7% of total US imports, compared to China at 14% and Mexico at 15% making less or no impact on its market behaviour for long durations of instability.

The recovery of Indian stocks after the ceasefire was announced is also a clear indicator that our fundamentals are strong. On the other hand, Pakistan stocks tanked since global investors know where it stands vis-à-vis India – be it economy, infrastructure, resources, planning, skills, etc. Therefore our investors need not worry in terms of returns during or post escalation.

Another stronghold of the Indian markets is that we have, for a significant period, managed to limit Chinese investments resulting in any kind of substantial effects on China having minimal or least impact on India unlike the situations and threats faced by other global markets. Also, our manufacturing capacities and capabilities are growing rapidly for the past few years positioning India as an alternate to China as a manufacturing hub. This, along with our more conciliatory approach with Washington, is also keeping our markets and investments stable and safe.

Initially, 26 per cent duty was proposed by Trump and our institutions are negotiating the present rejig with America, aiming for $500 billion in bilateral trade by 2030. We, as investors, should also not be moved with such ups and downs and pros and cons in the local and global markets as they are not permanent. We should also remember that our economy is one of the most stable economies in the world having surpassed major slumps and recessions in the past only to emerge more successful and powerful.

As told to Rajat Rai

‘Market Meltdown Post Trump Tariffs Shall Pass; No Need To Panic’

By LokMarg

Anand Mirani, a Bengaluru-based businessman and investor-trader, breaks down the real reasons behind the market crash post-Trump tariffs with valueable advice for investors

The markets are bleeding. Portfolios are deep in the red. And yet, I haven’t panic-sold a single stock. Am I worried? Of course. But I’m not surprised. Markets thrive on clarity. Right now, we’re knee-deep in uncertainty—and that’s the real culprit behind this crash.

It all started with the Trump administration’s aggressive tariff announcements. No warning, no detailed negotiations—just loud declarations that unsettled investors across the globe. It’s not just about what was said, but how it was said. When a sitting president treats every trading partner—friend or foe—with the same heavy-handed approach, it sends a message: the US, as the world’s largest consumption market (contributing nearly 30% to global GDP), is calling the shots.

Now, you might ask: Aren’t the intentions behind these tariffs good for America?

On paper, they are. President Trump wants to rein in the nearly $2 trillion fiscal deficit, bring manufacturing back home, and reduce government expenditure. All noble goals. An American would agree with the vision.

But what about the execution? Because if the method creates panic, then even the best intentions can trigger chaos. So why are the markets reacting this way if the overall objectives seem positive?

The answer lies in the ripple effect of tariff hikes. When import duties rise, the cost of goods in the U.S. goes up. That burden ultimately falls on the consumer, leading to a drop in consumption. As spending slows, businesses start pulling back on new investments. Capital expenditure projects get shelved, and companies wait to see how trade talks unfold with different nations. And that wait-and-watch mindset fuels even more anxiety in the market.

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To make things worse, businesses are unsure of the exact cost implications across sectors. Import costs are complex, and without clarity, cash flow projections become hazy. Add the looming threat of inflation and potentially higher government borrowing costs, and you have a recipe for rising equity risk premiums.

In financial terms:

Discounted Cash Flow = Future Cash Flows / (Risk-Free Rate + Equity Risk Premium)

If the numerator (expected future cash) is uncertain and the denominator (cost of capital) is climbing, the result is a lower present valuation of companies. That’s why we’re seeing a market selloff—the fundamentals aren’t matching the prices anymore.

Most investors are feeling the burn. Still, I’ve held my ground. Because long-term investing isn’t about avoiding losses—it’s about weathering storms.

So, what’s the way out for common investors like us?

The first step is capital preservation. In uncertain times, I shift allocations toward safer assets—gold, large-cap stocks, and sectors with more predictable cash flows. I avoid small and mid-caps with unclear growth visibility. I don’t panic-sell, and I certainly don’t make impulsive buys.

Most importantly, I stay patient. I wait for clarity on how the tariff situation unfolds, sector by sector, economy by economy. And for those who can afford it, hedging the portfolio—even if it comes at a cost—can be a useful insurance policy.

This isn’t the first market storm we’ve faced, and it won’t be the last. But if we understand the mechanics of what’s happening, and act with a cool head, we’ll come out of this stronger.

As told to Mamta Sharma