Market Expert Ajay Bagga Warns of Market Volatility Amid US Traiff Tensions: Two Possible Outcomes

 (By Ajay Bagga)

Markets are looking fragile today as Asia reflects the $ 5.4 trillion rout in the US markets last week.

I am not giving you any bear market wisdom or pretending to have any forecasting clarity.

There are two outcomes now:
1. The Trump Administration postpones/rollback reciprocal tariffs and negotiates.
2. As at present, The rump Administration stays put on this path and the April 9th rollout proceeds. 50 countries have apparently sought a negotiated settlement, China has announced retaliatory tariffs and the EU is meeting today to evolve consensus on that.

If Option 1 happens, expect a bounceback
If Option 2 continues, expect more market pain.

Am sounding like a chartist giving outcomes based on chart levels.

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‘Caution continues’: Market Expert Ajay Bagga on US Auto Tariffs Shake Global Markets

The problem is, like the Covid was a once in a once-in-a-century pandemic that hit us with no prior precedents except a very different world of the 1918 Spanish Flu , these Universal and Reciprocal tariffs are once-in-a-century and very unprecedented economic warfare tactics from the 19th century.

Applying them in the 21st century creates a difficult-to-analyse situation.
 

Impact on Indian Markets and Global Capital Flows
Indian markets cannot stand unscathed on our domestic structural story thesis. All are interlinked by global capital flows.

Calls for Fiscal, Monetary, and Reform Stimulus for Economic Recovery

What is needed is a fiscal response, a monetary response and a reform stimulus to help Indian industry and the Indian consumer.

Cut taxes, stimulate the economy, cut rates, inject liquidity, focus on 'ease of doing business'. 

That will be needed, irrespective of whether 1 or 2 happens.