Trump tariff: Stock market move today leaves Ashish Kacholia scratching his head

The domestic stock market managed to cope 'Liberation Day' Trump tariffs pretty well, with the benchmarks Sensex and Nifty falling a mere 0.4 per cent each at close. This left well-known value investor Ashish Kacholia scratching his head. He wondered why the market was not devastated despite a 27 per cent US tariffs on India.

He asked market veteran Samir Arora: "I am left scratching my head, what do you think?" 

At last count, Kacholia's portfolio, which included stocks such as Shaily Engineering, Beta Drugs, Ami Organics and Awfis Space Solutions, was worth Rs 2,491.61 crore, as per publicly available data with Trendlyne.  

Bernstein explained that the 27 per cent tariffs imposed on India by the US seem rather high, higher than what India levies on most US items. But two of India’s high ticket exports — IT services and Pharmaceuticals, are untouched by this announcement. It noted that healthcare is a sensitive sector. 

"Items like apparels and auto parts will see major tariff raises, but India seems protected from a competitive point of view, as tariffs on several south Asian economies that compete with India on these items are even higher. If at all, India can actually gain from China’s loss, which by some measures now stares at 54 per cent tariff if the existing 20 per cent are added on top of the additional 34 per cent," Bernstein noted. 

The foreign brokerage said the big loss though may come in the form of US discretionary spending, which can have medium term consequences for the economy if the tariff war heats up. This eventually may lead to some impact for IT firms. 

Emkay Global noted that Asia has been hit much more than India on tariffs and India is less export-exposed as compared with EM Asia. It though believe India is unlikely to be non-synced with EM Asia on the cyclical downturn.

"India has been negotiating with the US recently, and a trade agreement could be in the works. We highlight some “easy wins” that India could offer the US in exchange for tariff concessions (higher energy/defence imports, lower tariffs on specific food/agri commodities and foreign EVs)," Emkay Global noted. 

Trideep Bhattacharya, President & CIO for Equities at  Edelweiss MF said the its a relief that there is no incremental adverse impact on large exporting sectors like IT services, pharma and autos. 

He said it is relatively better for India in terms of improving relative competitive advantage versus Asian Peers, but the rise in recession related fears in US is a concern, he said.

Ashish Kacholia started his career on Dalal Street with Prime Securities. He moved to Edelweiss’ equity research desk, only his start his own broking firm named "Lucky Securities". Since 2003, Kacholia started focusing on building his own equity portfolio.