The markets are poised at an interesting juncture. The US stock markets were pounded for two days back to back as concerns about recession gained momentum after the new tariffs were unveiled. Indian markets, though resilient initially, gave in to the global fears as investors weighed the indirect impact of global slowdown. The big worry now is where should investors park their money? Anand Shah, CIO – PMS and AIF Investments, ICICI Prudential AMC says a mix of equity, debt, and some gold is advisable.
Though he is confident of 10-11% growth in Nifty earnings over 3 years, he warns that stock-picking will be more challenging going forward. One of his big worries is that the tech stocks, a high-expectation sector, may fall short of investor expectations. Here is his exclusive conversation with Financial Express.com on Trump tariff, GDP, markets and the art of stock picking.
How do you see the reciprocal tariff announced by US President Donald Trump impacting Indian companies?
Higher taxes on consumption mean either consumers pay more or manufacturers, exporters absorb the cost if they have higher margins. If not, the tariff burden passes on to the consumer translating to higher prices and slower growth in the US. From a manufacturers’ point of view, especially those reliant on US markets, this is a double whammy as both sales and margins could come under pressure. To counter growth challenges in the US, we could see higher Government spending in Europe, China and to some extent in India. While global consumption may rise on the back of supportive Government measures, inflation could limit gains. This makes domestic manufacturers serving domestic markets the biggest beneficiaries, be it in India, US, Europe or China.
ALSO READA 26% import levy by Trump on India poses risk of 30-60bps cut in FY26 growth estimates, says Morgan Stanley Would you say 2025 is a year for resetting expectations?
Yes. If we look back, the past four years have been exceptional. Growth rates have exceeded 30%, and markets have delivered over 20% CAGR. This was a recovery phase, as profit-to-GDP had fallen from 4.8% to 2%, and then rebounded back to 4.8%. Earnings grew faster, and markets performed better.
As a result, the last four years have led to unrealistically high expectations. Now,
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