TAKING STOCK OF TRUMP TARIFFS: INDICES REGAIN LOST GROUND AFTER INITIAL SHAKE-UP AS TRUMP SOFTENS STANCE.

Volatility in equity markets often creates an opportunity to buy quality stocks at attractive prices.

- CHITRANJAN KUMAR

The recent pullback in Indian equities, led by the tangle over U.S. tariffs, is offering investors a chance to buy stocks at cheap valuations. Employing a “buy the dip” strategy in such times is seen as a lower-risk approach to investing compared to entering the market when stock values are inflated at record highs, according to experts.

The Indian share market, in sync with global peers, has had a roller-coaster ride in April, initially on the downside and now, on the upside. In the first week of the month, the BSE Sensex and NSE Nifty50 nosedived over 5.5% each, while the volatility index or VIX (a barometer for measuring market uncertainty) spiked 80% to 22.79, its highest since June 4, 2024, triggered mainly by U.S. President Donald Trump's tariff announcements.

On January 20, his very first day in office, Trump announced an “America-first Trade Policy” that sought to address the country’s large and persistent annual trade deficits in goods—including economic and national security implications and risks resulting from such deficits—and undertake a review of, and identify, any unfair trade practices by other countries. On February 13, he called for a review of the non-reciprocal trade practices of America’s trading partners. On April 2, he announced ‘reciprocal trade tariffs’ against all trading partners, with additional tariffs on each country depending on the nature of their individual ‘trade imbalances’ with the U.S. The extra tariff on goods imported from India was put at 26%, while those from China were to attract 34%. While these country-specific tariffs were to be operational from April 9, a uniform 10% additional tariff got implemented with immediate effect.