VBL, ICICI Bank: 5 stocks to buy and keep in your portfolio this April

Indian markets have been on edge over the last two sessions after US President Donald Trump’s reciprocal tariffs on over 180 countries, including India, rocked global markets. The US reciprocal tariff of 26 per cent on India is higher than expected, but is relatively lower than that levied on other Asian countries like China (34 per cent), Vietnam (46 per cent), Thailand (36 per cent), Indonesia (32 per cent) and Bangladesh (37 per cent) which compete with India for export share.

 While the Indian markets were visibly stable on Thursday, the sentiment took a beating on Friday after Donald Trump said he was planning tariffs on the pharma sector “like never before”. Consequently, the Nifty index tanked over 300 points to hit the day’s low of 22,921.60, whereas the Sensex index crashed 1,009 points intraday.

As analysts suggest investors to tweak their investment portfolios, focusing on domestic-economy lined stocks, Motilal Oswal Financial Services (MOFL) has listed out five stocks that investors could buy in April 2024. The brokerage has picked Varun Beverages, SRF, ICICI Bank, Indian Hotels, and Amber Enterprises as its focus ideas for the month. 

At 1:30 PM on Friday, April 4, Varun Beverages share was trading 1.61 per cent down at ₹535.25, SRF share price was down 1.11 per cent at ₹2,869.10, ICICI Bank up 0.49 per cent at ₹1,336, The Indian Hotels share was down 3.15 per cent at ₹804.85, and Amber Enterprises stock was down 4.20 per cent at ₹6,638.55. In comparison, the benchmark Nifty50 index was down 308.25 points or 1.33 per cent at 22,941.85. 

From a technical perspective, the immediate support for the Nifty index is at 23,150, followed by 23,000 zones, while resistance is at 23,400, followed by 23,550 zones. 

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Trump speaks with India, Vietnam, Israel on trade deals ahead of deadline

President Donald Trump has spoken with representatives from India, Vietnam, and Israel to open talks on trade deals that may ease the impact of tariffs set to take effect next week, CNN reported on Saturday (IST). This outreach marks the first wave of diplomatic engagements since Trump announced blanket tariffs on more than 180 nations and reciprocal tariffs on Thursday. 

The reciprocal tariffs are scheduled to be enforced from 12:01 am ET on April 9 as part of Trump’s aggressive trade policy, which has imposed sweeping levies on 57 nations. While senior White House trade advisors Peter Navarro and Vice-President JD Vance have insisted that the measures signify a lasting realignment of global trade, other officials acknowledge Trump’s willingness to negotiate.

Mixed messages from Trump

Trump’s stance on the tariffs has been inconsistent. While he initially framed them as non-negotiable, he later hinted at possible compromises. Speaking aboard Air Force One, he claimed that multiple nations had reached out seeking deals, portraying the tariffs as a strategic tool for securing favourable agreements. 

“As long as they are offering something beneficial, we are open to discussion,” he said. “Look at TikTok as an example. China may want us to reconsider the tariffs in exchange for approving a deal. The tariffs give us significant leverage.”

“I wouldn’t want to be the last country to try to negotiate with Donald Trump,” the president’s son, Eric Trump, posted on X. “The first to negotiate will win—the last will absolutely lose. I have seen this movie my entire life.” 

However, the president also sent mixed signals, stating in a social media post on Saturday (IST), “Big business is not worried about the tariffs because they know they are here to stay. But they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our economy. Very important. Going on right now!!!” 

Despite backlash from corporate America, global trading partners, and even some members of Congress, Trump has shown no indication of backing down from his tariff strategy. His administration insists that these measures are essential to reshaping international trade relations in favour of the United States.

Shifting tariff rates and confusion

India was initially subjected to a 27 per cent tariff, later revised to 26 per cent. This was not an isolated case as 17 other countries also saw their tariff rates altered by exactly one percentage point. Confusions stemmed from discrepancies between Trump’s announcement on April 2 and the initial order which noted different figures – leading the administration to align the order with the president’s original statement. 

Vietnam has been hit particularly hard, facing a 46 per cent duty on its exports to the US. Meanwhile, Israel, despite having preemptively eliminated all tariffs on American imports in a bid to avoid retaliation, was still subjected to a 17 per cent levy.

India is actively engaged in trade negotiations with the US in hopes of mitigating the impact of the tariffs. Exporters are optimistic that ongoing bilateral talks could yield concessions that might ease the burden on Indian industries. 

Global response, trade war

The tariffs have triggered widespread repercussions. Global markets tumbled for a second consecutive day after China announced retaliatory measures, including a 34 per cent duty on American goods effective from April 10. Beijing also declared its intent to file a complaint with the World Trade Organization and suspend exports of rare earth materials. 

The European Union, subjected to a 20 per cent tariff, has pledged a measured and unified response, while Japan, which faces a 24 per cent duty, has urged restraint.

South Korea’s acting president has called for dialogue, while Bangladesh plans to formally appeal to the United States Trade Representative.

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Trump’s reciprocal tariffs to push US economy into recession: JPMorgan

JPMorgan Chase & Co. said it expects the US economy to fall into a recession this year after accounting for the likely impact of tariffs announced this week by the Trump administration. 

“We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3 per cent, down from 1.3 per cent previously,” the bank’s chief US economist, Michael Feroli, said Friday in a note to clients, referring to gross domestic product. 

“The forecasted contraction in economic activity is expected to depress hiring and over time to lift the unemployment rate to 5.3 per cent,” Feroli said.

President Donald Trump’s announcement Wednesday of major tariffs on US trading partners around the world sent the S&P 500 index of US stocks to its lowest level in 11 months, wiping away $5.4 trillion of market value in just two trading sessions to close out the week.

JPMorgan’s forecast came alongside similar changes from other banks, which have been slashing projections for US growth this year since the tariff announcement. On Thursday, Barclays Plc said it expects GDP to contract in 2025, “consistent with a recession.” 

On Friday, Citi economists cut their forecast for growth this year to just 0.1 per cent, and UBS economists dropped theirs to 0.4 per cent.

“We expect US imports from the rest of the world fall more than 20 per cent over our forecast horizon, mostly in the next several quarters, bringing imports as a share of GDP back to pre-1986 levels,” UBS Chief US Economist Jonathan Pingle said in a note. “The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy.”

‘Stagflationary Forecast’

Feroli said he expects the Federal Reserve to begin cutting its benchmark interest rate in June and proceed with rate cuts at each subsequent meeting through January, bringing the benchmark into a 2.75 per cent to 3 per cent range from the current 4.25 per cent to 4.5 per cent range.

Those cuts would come despite a rise in a key measure of underlying inflation to 4.4 per cent by the end of the year, from the current level of 2.8 per cent. 

“If realized, our stagflationary forecast would present a dilemma to Fed policymakers,” Feroli wrote. “We believe material weakness in the labor market holds sway in the end, particularly if it results in weaker wage growth thereby giving the committee more confidence that a price-wage spiral isn’t taking hold.” 

On Friday, Fed Chair Jerome Powell said “it feels like we don’t need to be in a hurry” to make any adjustments to rates. His comments followed the release of the latest monthly employment report from the Bureau of Labor Statistics, which showed robust hiring in March alongside a slight uptick in the unemployment rate, to 4.2 per cent.

Investors are betting on a full percentage point of reductions by the end of the year, according to futures.

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