In India, the Nifty 50 plunged over 5% in 4 days put up tariff announcement, whereas the India Volatility Index (VIX) shot up 65.7% to 22.8 on 7 April —its sharpest single-day spike since 2007. Although US President Donald Trump partially rolled again tariffs on 9 April, providing a 90-day pause for many nations (excluding China) , nervousness lingers.
Whereas markets initially rejoiced at this transfer, fueling a rebound within the blue-chip index Nifty 50, uncertainties linger. US recession anxieties solid a protracted shadow, and the eventual expiry of tariff reprieve poses a looming menace to uncovered companies. On this precarious panorama, the place can traders discover real security?
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Market consultants shared their insights with Mint to establish sectors and shares anticipated to climate potential trade-induced slowdowns or a full-blown recession, providing a refuge for traders.
Risk & alternative
Aamar Deo Singh, senior vp–analysis at Angel One recognized 4 sectors—electronics, jewelry, textiles, and pharma—as probably the most uncovered. “Pharma sector—at present tariffs haven’t been introduced, however there may be sure to be a big announcement by Donald Trump, so that might have an effect on our pharma corporations—to a destructive extent. So, that’s one thing we’ll should see—how the pharma corporations really handle this, as a result of that may hit their value competitiveness and can enhance their costs. Whether or not US demand holds up is an important query—research counsel that tariffs may add $3,800 to $4,000 to annual family bills,” he mentioned.
But, he identified India’s relative benefit. “The tariffs imposed on India are far decrease than these on international locations like China, Vietnam, Bangladesh, Sri Lanka, and Cambodia. Whereas India faces about 27% tariffs, others are a lot increased charges.”
On sectoral winners, Singh mentioned, “Electronics exports may gain advantage. Textiles is one other key sector, valued at about $2.5-3 billion, which holds potential for vital progress. If we play our playing cards proper, we may seize a bigger share of US-bound exports.”
Singh highlighted Arvind and Tata Chemical substances as key shares well-positioned to navigate market volatility. Arvind has surged 20% over a yr, benefiting from its export-oriented technique and vertically built-in operations. In the meantime, Tata Chemical substances, regardless of a 23% correction in a yr, stays his favourite as a result of its international footprint and diversified enterprise mannequin, making it resilient in these unsure markets.
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Historical past speaks
Akshay Chinchalkar, head of analysis at Axis Securities, emphasised on classes from previous market downturns. “Throughout the 2008 international monetary disaster, the Nifty dropped 60% over 10 months, and all sectoral indices fell. But, the least injury was seen in defensive pockets: Pharma, fast-moving client items (FMCG) and data expertise.”
Chinchalkar famous that the tariff state of affairs marks “a brand new template” for international markets. “Stagflation dangers are rising by the day. Volatility itself has turn into extra unstable, and huge, outsized strikes are being witnessed throughout each asset class and almost each day.”
He advisable specializing in corporations with “excessive earnings visibility, market management, and sectoral dominance.” His agency stays chubby on massive non-public sector banks, telecom, consumption, hospitals, and interest-rate proxies.
“We’re cautious on tech as a result of international headwinds and focus threat in mega-cap names. If the tariffs-led upheaval pushes the US financial system into recession, the home tech sector shall be impacted as a result of lowered discretionary spending,” he added.
His high suggestions embody banking heavyweights ICICI Financial institution and HDFC Financial institution, telecom chief Bharti Airtel, FMCG participant Varun Drinks, healthcare shares Max Healthcare and Lupin, together with capex-oriented performs APL Apollo Tubes and Kalpataru Tasks, following latest value corrections.
The banking sector exhibits robust fundamentals, with ICICI Financial institution delivering 27% returns over the previous yr and sustaining a wholesome 17% return on fairness (RoE). HDFC Financial institution, regardless of experiencing slower deposit progress after its merger, continues to show structural power with 24% annual returns.
Bharti Airtel has surged 50% over the yr, pushed by tariff hikes which have boosted income and strengthened the underside line, with expectations of elevated dividends by 2026. The buyer sector presents an attention-grabbing case with Varun Drinks – regardless of a 15% year-to-date correction. Analysts stay bullish given its favorable positioning for seasonal demand and strong distribution community.
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Native protect
Based on Vikas Jain, head of analysis at Reliance Securities, sectors linked to home consumption and autos are higher insulated.
“Export-driven sectors like IT and pharma shall be among the many worst hit as a result of tariffs, as there may be nonetheless no readability on the extent of those duties,” he mentioned. “When it comes to information factors, sectors associated to exports stay susceptible—as an example, the IT sector has already declined put up tariff announcement.”
Then again, he added, “The buyer sector stands to learn as home demand might enhance. With two charge cuts of 25 foundation factors every, the sector—which was beforehand on a declining pattern—has began to indicate some constructive momentum since then.”
Inside autos, Jain expects Bajaj Auto and Hero MotoCorp to see momentum, whereas Tata Motors might face strain as a result of export publicity. He additionally sees upside in Voltas, Havells, and Blue Star, pushed by margin enhancements and quantity progress.
Security trio
Sunny Agrawal, head of elementary analysis at SBI Securities, sees potential in sectors least uncovered to international commerce.
“Consumption staples, energy utilities, and huge financials provide relative security in downturns, particularly in a tariff recession,” he mentioned. His high concepts embody Emami, Indian Accommodations, ITC Accommodations, NTPC, Energy Grid, REC, and PFC.
Agrawal additionally likes massive lenders corresponding to Financial institution of Baroda, and housing finance gamers like Bajaj Housing Finance, PNB Housing, and Bajaj Finance. Amongst autos, he highlighted M&M, Escorts, and Uno Minda as beneficiaries of rural resilience and infrastructure spending. In cement, Ultratech, Ambuja, and JK Lakshmi had been cited as long-term structural bets.
Demand pushed
Amit Jain, co-founder at Ashika International Household Workplace Companies, additionally suggested traders to concentrate on corporations with restricted international publicity. “FMCG, domestic-focused banks, healthcare (with minimal exports), and insurance coverage sectors provide relative insulation from tariffs and international slowdown dangers, backed by regular money flows and resilient demand,” he mentioned.
He named HUL, ITC, Kotak Mahindra Financial institution, and Dr. Reddy’s as most popular performs. “Many of those have traditionally proven robust resilience throughout downturns. Their strong steadiness sheets and concentrate on home demand assist them climate international shocks higher than most.”
Vishnu Kant Upadhyay, AVP–analysis & advisory at Grasp Capital Companies, echoed the defensive tilt. “Whereas no sector is resistant to financial shocks, FMCG, healthcare, utilities, and diversified companies have proven decrease draw back threat throughout market turmoil.”
“FMCG corporations producing necessities see regular demand. Healthcare wants stay inelastic. Utilities, too, provide predictable earnings as a result of regulated pricing and necessity-driven consumption,” he added.
