Trump tariff impact: CLSA flags ‘hit to safe haven' status; brokerages see export, GDP risks for India
Leading brokerages including CLSA, Nuvama, and Elara Securities have cautioned against the economic and market implications of former U.S. President Donald Trump's fresh tariff measures, including a 25% import duty on Indian goods. While some macro indicators may soften the blow, analysts flagged sectoral vulnerabilities and risks to India's perception as a safe haven for global investors.
CLSA said that Trump's imposition of a 25% tariff and penalties related to India's trade with Russia could alter India's perceived position as a neutral and strategic trade partner. The firm noted that India's ability to maintain a balanced geopolitical relationship with both the U.S. and Russia had so far benefited its safe haven status. However, the latest U.S. action raises doubts over whether India can continue leveraging this dual relationship, especially amid a bi-polar global order.
The brokerage added that these developments come at a time when Indian equities are already among the most expensive in the world, making them more sensitive to foreign fund outflows. A reduction in optimism around India's relative trade advantages and higher tariffs could hurt key exporting sectors such as electronics, pharma, and industrials. CLSA also warned that if crude oil supply from Russia is curbed, it may drive prices up, adversely impacting India.
Nuvama, meanwhile, believes India's overall GDP impact may be limited due to the small contribution of U.S.-bound exports, though the trade redirection to other nations could provide some cushion. It also noted that sustained INR weakness might help limit the tariff blow. However, it flagged the broader risk of a shrinking U.S. trade deficit, particularly amid a weaker dollar and higher interest rates.
Elara Securities projected a potential 30 basis points hit to India's GDP growth in case a new trade deal isn't reached with the U.S. The brokerage highlighted direct exposure for sectors like pharmaceuticals, auto ancillaries, industrial machinery, and gems and jewellery. However, it sees a possible upside for IT firms due to the weakening rupee. Elara also noted that India's post-tariff trade rate now exceeds that of Vietnam, the Philippines, and Indonesia—posing a competitive disadvantage.
Disclaimer: The views expressed in this article are based on brokerage reports and do not constitute investment advice. Please consult your financial advisor before making any investment decisions.
Ahmedabad Plane Crash
News desk at BusinessUpturn.com
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
a few seconds ago
- Yahoo
British American Tobacco (LSE:BATS) Reports GBP 4,512M Income with Revenue Growth Expectations
British American Tobacco recently reported steady performance in its half-year earnings, with a slight dip in sales but stable net income. The company also confirmed its full-year guidance, anticipating revenue growth at the higher end of expectations. This positive outlook coincided with a 25% rise in its stock over the last quarter, possibly bolstered by the expanded buyback plan and sales performance of new product categories. Despite broader market downturns, such as tariff-induced investor concerns and weaker jobs data, British American Tobacco's strategic corporate actions likely contributed to buoyant investor sentiment. Every company has risks, and we've spotted 3 weaknesses for British American Tobacco you should know about. Trump's oil boom is here — pipelines are primed to profit. Discover the 22 US stocks riding the wave. British American Tobacco's recent performance and optimistic outlook, as explored in the introduction, highlight its resilience amid challenging market conditions. Over the past five years, the company's total return, including share price and dividends, was 138.77%, illustrating robust long-term shareholder value. In comparison, over the past year, the company's stock performance exceeded the UK Tobacco industry, which returned 40.9%. This strong performance may reflect investor confidence in BAT's innovative product strategies and operational efficiency improvements. Despite broader market headwinds, the company's share price ascent in the last quarter suggests positive investor sentiment fueled by expanded buybacks and anticipated revenue growth from new categories. The impact of recent developments on British American Tobacco's revenue and earnings forecasts is significant. The expansion in new categories and investments in innovation such as glo Hyper Pro and Velo+ are expected to boost future revenue growth. Operational efficiencies and focus on the U.S. market further underpin profit margin enhancement expectations. Analysts forecast earnings to reach £7.9 billion by 2028, a surge from current levels, supporting optimistic future growth assumptions. Despite trading at a slight premium to the analyst consensus price target of £39.0, the current share price of £40.40 reflects investor confidence in the company's future trajectory. The small share price discount to the target underscores varying analyst perspectives on BAT's valuation. It highlights the importance of individual assessment of the company's potential, given its ambitious revenue and earnings targets amidst ongoing industry challenges and regulatory risks. Thus, investors may want to critically evaluate whether recent operational and market developments align with long-term growth expectations. In light of our recent valuation report, it seems possible that British American Tobacco is trading behind its estimated value. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LSE:BATS. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
Yahoo
a few seconds ago
- Yahoo
Apple and Amazon earnings should end tech stock bubble fears: Opening Bid top takeaway
A weak jobs report with a side of hot tech earnings and fresh tariffs. The US economy created 73,000 jobs in July, falling short of estimates for 100,000. And there were large downward revisions to May and June jobs numbers! The unemployment rate held steady at 4.2%. Investors are likely to wonder if the Trump administration's tariff policy — including new levies on goods from Canada and other top trading partners today — is beginning to weigh on hiring plans and the economy. Queue those Trump rate-cut posts on Truth Social. The economic read comes on the heels of strong earnings from Apple (AAPL) and Amazon (AMZN) last night. The duo capped an impressive earnings week for large caps, with Meta (META) and Microsoft (MSFT) being the other standouts. Even second-tier Big Tech names in Roblox (RBLX) have crushed expectations (watch CEO Dave Baszucki's interview above). Most importantly, Amazon, Apple, Alphabet (GOOG, GOOGL), Microsoft, and Meta all put to bed one fear: Lofty valuations supported by hopes for AI-driven growth may not be lofty enough. Zoom in: Large-cap tech earnings quiet the naysayers Not only did Amazon, Apple, Meta, and Microsoft show strong growth throughout their giant businesses, but execs also conveyed that AI is unlocking new avenues of growth for the quarter to come. Their bottom lines also easily eclipsed Wall Street forecasts. Reports were generally embraced (save for Amazon, where investors opted to lock in on an OK outlook rather than a blowout outlook). "As the main engine of US equity profitability for the last few years, 2Q25 results from Alphabet, Meta and Microsoft suggest that growth momentum is intact," Barclays strategist Venu Krishna said. It's a point well taken. Apple's services growth tallied 13% last quarter and is expected to increase at a similar pace in the current quarter. Quarterly iPhone sales increased 13% from the prior year and improved in every geographic market. The company had the saddest story to tell on the AI front, but CEO Tim Cook still did enough on the earnings call to temporarily ratchet down worries that Apple will be a nonentity in AI. The company has spent $15.5 billion in capital expenditures in the first half of the year, up from $11 billion a year ago — underscoring its AI investment roadmap. AI rollouts by big companies continue to feed Amazon's lucrative AWS cloud business. Second quarter sales for AWS rose 17.5% from last year, accelerating from a 16.9% growth rate in the first quarter. Amazon CEO Andy Jassy said on the earnings call that demand for AWS is outstripping supply. "We highlight several potential catalysts in the intermediate-term that could possibly offset some near-term uncertainty, including (1) more meaningful improvements in cost to serve driven by deeper automation and robotics, (2) commercialization of new AI capabilities in Alexa, (3) monetization of Project Kuiper which could begin late this year, and (4) an expected increase in Prime Subscription prices in 2026," Wedbush analyst Dan Ives said. The same vibe was seen at Microsoft as sales at the Azure cloud business accelerated 4% sequentially. Azure's growth "further validates Microsoft's share gains and leadership in monetizing AI," Citi analyst Tyler Radke said. Then there was the report of the week out of Meta. On top of a 22% sales increase, the company signaled that the good times will keep on rolling as it plows deeper into artificial intelligence. AI investments are beginning to pay off in terms of driving more sales growth, execs told the Street. Perhaps more important than the sales increase is that operating profit margins rose despite megaspending on AI projects. KeyBanc analyst Justin Patterson said, "Meta's 2Q results reinforced that AI is driving positive impacts on engagement and advertising, which enables Meta to invest more in AI capacity." Given the strength, one has to wonder if these stocks are actually cheap despite their above-market multiples. The answer to that may be yes — it's hard to see what squashes their financial momentum over the next 12 Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email
Yahoo
a few seconds ago
- Yahoo
Dow falls 600 points, Tesla Europe sales, T. Rowe Price earnings
Here are some of the stories Wall Street is watching on Friday, Aug. 1. All three major indexes (^DJI, ^GSPC, ^IXIC) are falling after the July jobs report revealed slower-than-expected job growth. Tesla (TSLA) sales fell in July in several key European regions, including France, the Netherlands, Denmark, and Sweden, though registrations in Spain and Norway rose. T. Rowe Price (TROW) posted better-than-expected second quarter results. Stay up to date on the latest market action, minute-by-minute, with Yahoo Finance's Market Minute. It's time for Yahoo! Finance's Market Minute. Stocks sinking in the first trading day of August after President Trump officially hit virtually every US trading partner with sweeping tariff hikes. Investors also weighing the latest jobs report that shows signs of a labor market slowdown, the US labor market adding fewer jobs than expected in July, while the unemployment rate moved higher. Turning to Tesla, the EV maker continues to see sales weakness in Europe. Registration data, proxy for sales, was lower for key regions such as France, Netherlands, and Denmark. However, some bright spots for Tesla, too, as registrations for Spain and Norway climb. Lastly, T. Rowe Price reporting better than expected earnings for the second quarter. Meanwhile, assets under management roughly met analyst expectations. Company highlighting it has developed a broad and ongoing plan to reduce its expense growth over time while continuing to invest in capabilities and client reach. And that's your Yahoo! Finance Market Minute. For more on what's trending on Yahoo! Finance, scan the QR code below. Related Videos Apple is still 'behind the 8 ball' as its AI push falls behind Bond yields drop, Figma's volatility, Palantir-Army deal What Trump's tariff hikes could mean for Apple & Amazon Kimberly-Clark, Roku, Joby Aviation: Trending Tickers Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
