Fidelity, Goldman finds tariff Haven in Asian consumer shares

(Bloomberg) – The global trade war provides a prosperity for Asian consumer shares, as investors take shelter in companies that meet the essential needs of local buyers. Strategists at Goldman Sachs Group Inc. and Morgan Stanley recommended Asian consumer crabs in reports released after April 2, which requested investors to become defensive. Fidelity International said it has picked up battered Chinese consumer shares and bets that the businesses benefit from the government’s stimulus. The MSCI Asia Pacific Consumer Staples Index has risen by 5% since April 2, beating the best performance among 11 sectors and the broader benchmark’s 2.5% decline. Supermarket chains Yonghui SuperStores Co. In China and Kobe Bussan Co. In Japan, at least 19% rose, while some other beverages and dairy manufacturers also performed well. This is a sharp turnaround in the fate for the sector, which has sounded technician technical shares over the past few years. This underlines a rotation away from growth stocks, as US-China trade threatens a global economic slowdown. The cohort also gets a boost of signs that Asian governments are ready to carry out fiscal stimulus to support spending. The better performance indicates a “shift in investor thoughts from global growth and export to domestic demand for fancy,” says Charu Chanana, Saxo Market’s main investment strategist. ‘Investors are starting to price in a more fragmented, protectionist world’, where local policy support and consumption matter more, she said. While a protracted trade war would save few sectors, consumers showed staples resilience in times of economic stress. It also helps that the sectoral benchmark for four years has dropped to 2024 for four years, compared to the MSCI Asia Information Tech partner’s largely uninterrupted perennial advance since 2019, which has a space for catching up. The emerging rotation can stretch as fiscal stimulus plans are revealed. Chinese authorities recently listed 48 measures to expand household spending in catering and health care, while South Korea won its supplementary budget plan to 12 trillion ($ 8.4 billion). In India, the prediction of an above -average monsoon is expected to improve rural demand. Fidelity International took advantage of the lead in the Chinese and Hong Kong shares on April 7 to boost the holdings in consumer staples and some travel-related discretionary names, says Terrence can, a customer portfolio strategist. He benefits shares on the continent on Hong Kong traded, given the former, possibly more benefit from Beijing’s support measures. Asian consumer stocks also fared better than peers in the US and Europe during the turmoil of the market thanks to rapid vows of policy support. In a report on April 6, Goldman streets raised their recommendation for Asian consumer crabs to overweight of the market weight, saying that they are tilting more ‘domestic and defensive’. JPMorgan Chase & Co. Strategists took a similar step for the cohort in Southeast Asia on Thursday. Hironori Akizawa, head investment officer at Tokyo Marine Asset Management International, said: “Consumer Staples is not an industry where the question varies much,” and there are relatively few names with great exposure to US exports. “A positive scenario would be that central banks would move to lower interest rates and stimulate consumption. ‘In contrast, shares of discretionary goods have suffered from the expectation that households will cut non-essential spending. The MSCI Asia partner for consumer discresionarys has dropped by more than 5% since April 2, the second largest drop between sectors. According to James Thom, senior investment director of Asian stocks at Aberdeen Investments, a risk to consumer staples will be a flare -up in inflation, which could combat the enthusiasm for the sector. For the time being, a consensus forms that steps are a safer bet. The sectoral meter is expected to grow twice the earnings that the MSCI Asia Pacific Index can deliver over the next 12 months. “Staples will remain a focal point for investors in these conditions, while we can see that a switch to the discretionary and service sectors can return if the risk appetite returns,” said Nick Twidale, chief market analyst at Global Markets in Sydney. “I feel that it will only happen with a change from the US on rates.” More stories like these are available on Bloomberg.com © 2025 Bloomberg LP first published: 20 Apr 2025, 05:51 am Ist