Trump Tariffs Paused: Which Sectors Could Rally in the Next 90 Days?

Global markets heaved a sigh of relief as shares surged and bond selloffs eased on Thursday followed by the United States President Donald Trump's announcement declaring an immediate 90-day pause on tariffs.

After Wall Street's biggest four-day percentage loss since the pandemic, the rally was triggered by Trump's announcement where he said that he would temporarily lower many new tariffs, while also raising the levy on Chinese goods up to 125%.

Which Sectors Will Benefit From This?

As markets were closed on April 10 on the occasion of Mahavir Jayanti, the Indian markets will see a benefit in stocks from these sectors as markets reopen on April 11.

IT Sector

Lately, there has been a significant slump in IT stocks, as Nifty declined over 10% since April 2. All major IT players derive a significant portion of their revenue from the US. The fear of Tariffs instigated by Trump's administration in investors' sentiments, acted as a fear-factor for these stocks. However, Goldman Sachs dropped their US recession forecast after the tariffs were paused, which is expected to have a positive impact on IT stocks.

Auto Component Makers

The shares of this sector slid recently as Trump announced reciprocal tariffs. These stocks may benefit as tariffs have now been paused.

Metals

While metal stocks have been the worst hit by tariffs, this sector may be in the green now as tariffs have been paused, wherein copper and other metal prices have already shot up after the temporary relief. Lower risk of a US recession may help metal stocks along with China's stimulus plan.

Realty

The tariff pause and 25 bs cut in RBI's repo rate is likely to influence realty stocks due to positive sentiments backed by the tariff pause.

Fishery

The stocks of shrimp feed firms tumbled after US President Donald Trump announced reciprocal announced tariffs on several nations including India. It is important to note that these firms have a strong export exposure to the US. This may, therefore, boost shrimp stocks.

Solar EPC Companies

Indian solar engineering, procurement and construction (EPC) firms have significant exposure to the US market and the tariff pause is set to benefit these companies.

Textile

The biggest supplier of textiles and apparel to the United States is China and Indian textile players may benefit from the 125% tariff imposed on Chinese imports. But Bangladesh and Vietnam are also large exporters of textile to the US. The tariff hike on China will in all likelihood benefit textile stocks. The pause on higher tariffs on imports can, however, negatively impact stocks.

Electronic Parts Makers

Electronics manufacturing service (EMS) firm stocks in India can see an uptick as global brands like Apple may continue to source parts from India. These shares are already on the rise since reports have stated that Apple is planning to source more iPhones from India to the US to beat the tariffs imposed on China. 

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