Chris Wood of Jefferies bets on India as Global Trade Storm Brews; Increase Award in Asia -Pacific Portfolio | Einsmark news

In a week characterized by global financial turmoil and increasing protectionist fear, Chris Wood of Jefferies doubled on India. In the latest issue of its Greed and Fear Newsletter, the veteran strategist has a two percentage points increase in India’s award in Jefferies’ Asia-Pacific Japan-Relative-Yield Portfolio announced-which increases the country to overweight by reducing exposure to Taiwan. The move underlines Jefferies’ belief that India could be a macro -economic safe haven in a world scratched by fear and volatile tariff policy. India’s macro shield in a shaky world Chris Wood has credited the shift to a detailed analysis by Mahesh Nandurkar, Jefferies head of India. According to Wood, Nandurkar laid out a compelling five-point argument that favored India over the country’s relative isolation of world shocks. At the top of the list is the low dependence on India of trade with the United States and China, which protects it from the kind of direct economic setback that is now hammering the export reports economies. As protectionist policies are getting traction worldwide, India’s low average tariff appearance emerges as a strategic lead, Wood wrote. The recent drop in oil prices contributes to the appeal – an important positive for India, which is a net oil importer. Lower oil costs are expected to ease the pressure on inflation and current account deficit, creating the macro economic main space for growth. FPIs on the sidelines, RBI in the Nandurkar driver’s seat, cited by Chris Wood, also see a case for a boom in the interests of foreign portfolios (FPI), and note that India still has room for increased awards. This comes at a time in which the Reserve Bank of India maintains a growing policy status, in contrast to the tightening in many other major economies. While Jefferies hopes that Washington’s aggressive trade rhetoric may eventually be moderate, the weakening of trends in both the US and the Chinese economies remains its base case. In accordance with this portfolio reform, Jefferies also reduces his exposure to global sectors such as that and metals-which are going on that they are likely to feel most of a synchronized global slowdown. US Markets: “Hovery Day” and the crumbling risk -free narrative while betting on India’s resilience, Chris Wood issued a clear warning in US markets. In his latest comments on the greed and fear, he described the tariff shock on April 2 as “Hovery Day”, referring to the evaporation of US $ 7.4 trillion in the US stock market and an incredible US $ 12.8 trillion in global stock losses from Tuesday. Although a minor setback followed President Trump’s partial turnaround, Wood noted that the damage had already been done. What caught Wood’s attention in particular was a confusing market reaction: the US dollar weakened, even though yields were climbed on the long-term treasury-a rare combination during a risk foundation. This indicates deeper structural problems, Wood argued, suggesting that the fear of the growing supply of US debt could undermine the basis of treasury effects as ‘risk-free’ assets. And if the credibility is shaken, the US dollar’s reserve currency could also be at risk. Wood rejected the theories of Chinese retaliation through bond sales, arguing that recent Treasury sales were probably caused by forced finishing the ‘base trade’-a leverage arbitrage strategy. Rates, recession and wrong expectations according to Wood, the structure of the newly announced rates – based on bilateral trade deficits – has undermined US credibility, especially among European investors. While a 90-day break in reciprocal rates provides temporary relief for anyone except China (facing a 125 percent charge), Wood asked the question whether this postponement would apply. Still, he warned that rates eventually function as regressive tax carried by US consumers, not foreign exporters – a fact is likely to surprise a lot as the price of imported goods rises. As Chris Wood sees it, global investors now navigate a story of two markets -one where India’s macro -strong points and domestic resilience make it a compelling overweight, and another where the US financial system flashes warning signals about credit, fairness and foreign exchange markets. Although India’s path can be strengthened by falling oil prices and accommodating policies, the US faces the double threat of policy errors and systemic leverage. In this developing landscape, Jefferies’ strategy is clear: leaning in macro stability and keeps away from increasing global volatility. Disclaimer: The views and recommendations above are those of individual analysts or brokerage companies, and not of currency. We advise investors to check with certified experts before making investment decisions. First published: 11 Apr 2025, 02:22 PM IST