April Pulse - Sage Views - Markets at a turning point - Trump Tariff Tantrums
- Nikhil Gupta
- Apr 11
- 3 min read
Updated: Jul 29
“Opportunities to purchase what we deem to be attractively undervalued companies occur more frequently when stock prices are volatile.” Chuck Royce
Dear Investor,
Indian equities recovered in March’25 after five successive months of correction, up 6.3% mom led by foreign inflows in the second half of the month, as FIIs end up as net buyers (Rs 20bn) after six months. Within Nifty, all sectors other than IT gained, with Financials and Energy the top gainers. DIIs were net buyers (Rs 376bn). In Nifty 50, weights for Discretionary, Financials and Industrials rose, while it dipped for IT, Staples, Energy and Auto. Currently, Nifty is trading at a 1-year fwd PE of 19.0x.
Within Nifty 50, sectors are trading at a 0%- 29% discount to their 1-year peaks. Discretionary has corrected by 29%, Energy/IT/Staples by ~20%, Utilities by 19%, Industrials by 16%, Materials/Healthcare by 12%, Metals by 9%, Financials by 1%, and Communication Services by 0%.
Market Outlook: This month started with a lot of volatility in global markets as we saw Trump tariffs startling stock markets across the world. My personal opinion on this was that this was more like a bargaining tool for him to negotiate tariffs with every country and manage the US debt that has been piling up for years. It actually might have worked in his favour with a lot of countries opting to negotiate or even bring it down to 0. Those dragons :) who did not negotiate, face further problems with tariff upwards of 125%. How does all of this matter to us and to all our portfolios?
It matters to us since the future economy will take shape from this tariff impact as their loss will be India’s gain, and indirectly, it affects our markets positively, which in turn affects our portfolio. We believe markets to see a V-shaped recovery on any major fall from here on.
The RBI decreased the repo rate by 25bps to 6%, which is good news for banks and the NBFC sector. This will be a catalyst for growth for India Inc. as loans will become cheaper, and hence deploying capex will be easier for promoters. The RBI has also given a decent GDP growth expectation, which is in the range of 6.5-7% while the inflation expectations are around the target 4%, we expect all these indicators to be good for our economy as well as the markets. With crude hovering around $60 and the dollar at ~$85 levels, fiscal deficit is expected to remain in control.
What should investors do?
We have been asking our investors to add on every dip, and we continue to have the same view. Markets might see one last quarter where we will see some more volatility however, all those investors who have stayed invested until this point should definitely look forward for some green colour in the second half of 2025.
This is a summary of market corrections that have taken place in the past and 5-year Nifty Returns post every correction, the most recent being the COVID-19 crash in 2020. If you take a glimpse at the above table, these are phenomenal returns at the index level. While you might not be able to catch the market at its bottom level, you can enter gradually in tranches or somewhere in between, which will still give you great returns.
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Happy Investing!
Warm Regards,
Nikhil Gupta
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