With Donald Trump’s reciprocal tariffs kicking in, should you accumulate Indian stocks? | Stock Market News

In March, indexes swayed up and down due to overall uncertainties about US Tariffs. However, after five months of fall, the Nifty was up 6.4% for the month.

After several months of relentless selling, FPIs significantly reduced short positions in index futures, with their long-short ratio rising to 0.66, the highest since December 13, 2024. Additionally, they have shifted to net buying in the cash segment, investing ₹32,576 crore over six sessions. The buying reflects that the market valuations have reached reasonable levels at a P/E of 18.8x one year forward, the lowest in the last five years.

In March, defense, industrials, and financials rose from oversold territories, and valuations remain reasonable.

While markets recovered in March, nervousness rose as we approached President Trump’s US tariff announcements on 2nd April 2025.

However, the 25% US tariffs announced on the automotive industry have a limited impact on India’s auto industry and more on the automotive industry ancillary sector.

Tata Motors has a limited impact on its JLR business. Still, outside of that, given that India is not such a large exporter of automobiles into the US, it is unlikely to impact the overall sector or the market significantly.

Financials fell in February due to the market correction. However, the interest rate cut cycle beginning in India is positive for financial services. While net interest margins might come down a little bit for banks, the volumes will pick up because of lower interest rates as the overall environment revives. We believe PSU banks and NBFCs would be beneficiaries. Private banks, too, are worth considering.

We are hopefully reaching a point of revival that would lift manufacturing.

As it revives and economic activity revives, demand for power goes up. As a result, all power companies raise their volume of business to produce more power, and earnings improve.

India must produce a lot of power to meet demand, but the long-term story is intact.

Power financiers such as REC and Power Finance Corporation (PFC) are power and infrastructure financing leaders. Moreover, due to their strong balance sheets, they are worth evaluating.

These firms lend to thermal, renewable energy, and infrastructure projects.

Additionally, auto stocks like Bajaj Auto and Hero MotoCorp have corrected, making their valuations palatable.

As interest rates fall and economic activity picks up, cement demand and volume growth will rise.

Cement prices have not gone up even in line with inflation, giving the companies scope to raise them.

UltraTech Cement and ACC are the market leaders with reasonable market share.

Retail companies saw slow growth due to a weak consumer. However, Income tax cuts provide additional purchasing power, making retail stocks worth considering.

President Trump is expected to announce tariffs over the next week on 2nd April. If President Trump gives India more time until the Autumn of 2025 to reach a bilateral agreement, then it would be a good time to accumulate India’s Stocks.

However, it is prudent to contact your financial advisor to select an investment appropriate for your risk tolerances.

The author, Chakri Lokapriya is Chief Investment Officer, Equities of LGT Wealth.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making investment decisions.