
Markets holding strong despite soft earnings and liquidity drain: Prateek Agrawal
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
"On the trade deal, we've already taken some steps — we've opened a few cards with our trade agreements with the UK, and now we're working on one with the EU. What we're offering is gradually coming into the public domain. Similarly, other countries are also making deals — Japan has signed something, Indonesia has too — and that gives us a sense of what's possible," says Prateek Agrawal, MD & CEO, MOAMC.A few thoughts. Many of the larger companies that have reported results so far may have been slightly on the softer side, yet the markets are holding up, and these companies' stocks are also holding up quite well. That, to me, indicates market strength . On the other hand, companies that have done well and beaten expectations have seen strong responses from the market, which again reflects the same underlying strength.And this is happening despite a very tough IPO and QIP market, which is draining a lot of liquidity from the system. So overall, I would say the market construct looks very solid.Secondly, on the trade deal, we've already taken some steps — we've opened a few cards with our trade agreements with the UK, and now we're working on one with the EU. What we're offering is gradually coming into the public domain. Similarly, other countries are also making deals — Japan has signed something, Indonesia has too — and that gives us a sense of what's possible.What strengthens India's position in negotiations is the sheer size of the Indian market. Today, it may be slightly smaller than Japan's, but in the future, it will be the second-largest market in the world. So, when we open up our market, we're offering something very significant. As we see how different countries are positioning themselves, the realm of possibilities starts narrowing, and if it narrows the way I expect, it could be very positive for ' Make in India '.Competing countries might offer concessions closer to 30%, while we may only offer something in the range of 10–15%. So, fingers crossed. Let's hope it happens. We've seen instances where we came very close to a deal, and it didn't materialize. So, all outcomes are still on the table, but today, I am optimistic. A good deal could make our manufacturing more competitive in the world's largest current market — and for the US, it opens a gate into what will soon be the second-largest market in the world.There's a short-term view and a long-term one. If you look at the cost and availability of labour, over time, Indian manufacturing should have a distinct advantage. The US is one country that could lift us up too, but of course, our people need to be capable and ready to seize the opportunity — it works both ways.In the immediate term, think about it: the US wants to do more high-end work — things that align with their 'Make America Great Again' vision — but most of that won't be labour-intensive. They don't have enough labour. So, for labour-intensive production, they'll want to source from other countries. India, being the most populous nation in the world, should benefit here.We'll need to tweak laws and make things happen, but the opportunity is massive. The not-so-great part is that very little of this is currently represented in the Indian market. For example, how much textile can you buy? It's a tiny space. Leather goods? Same story. The entire Apple ecosystem, for instance, is outside the listed market.Yes, over time, EMS players might gain access to the US market, but today they're more focused on import substitution domestically. So, while the long-term outlook is promising, in the near term, not much will change for the stock market.The last time a similar narrative emerged — around January–February — we believe the real issue was currency and interest rate volatility. US yields were tight, and the rupee depreciated nearly 5% in about 10 days. That spooked foreign investors, who are extremely sensitive to dollar returns, and they pulled money out.But now, as things have stabilized, they're back. We've had four months of inflows. This month might be negative, but before that, it was positive. So, in the short term, we suggest watching currency markets and bond yields. The trade deal's impact may be limited in the immediate term — but over time, yes, it could be significant.

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

The Hindu
13 minutes ago
- The Hindu
U.S.-EU trade deal wards off further escalation but will raise costs for companies, consumers
President Donald Trump and European Commission President Ursula von der Leyen have announced a sweeping trade deal that imposes 15% tariffs on most European goods, warding off Mr. Trump's threat of a 30% rate if no deal had been reached by August 1. The tariffs, or import taxes, paid when Americans buy European products could raise prices for U.S. consumers and dent profits for European companies and their partners who bring goods into the country. Here are some things to know about the trade deal between the United States and the European Union: What's in the agreement? Mr. Trump and Ms. von der Leyen's announcement, made during Mr. Trump's visit to one of his golf courses in Scotland, leaves many details to be filled in. The headline figure is a 15% tariff rate on 'the vast majority' of European goods brought into the US, including cars, computer chips and pharmaceuticals. It's lower than the 20% Mr. Trump initially proposed, and lower than his threats of 50% and then 30%. Ms. von der Leyen said the two sides agreed on zero tariffs on a range of 'strategic' goods: Aircraft and aircraft parts, certain chemicals, semiconductor equipment, certain agricultural products, and some natural resources and critical raw materials. Specifics were lacking. She said the two sides 'would keep working' to add more products to the list. Additionally, the EU side would purchase what Mr. Trump said was $750 billion worth of natural gas, oil and nuclear fuel to replace Russian energy supplies, and Europeans would invest an additional $600 billion in the U.S.. What's not in the deal? Mr. Trump said the 50% U.S. tariff on imported steel would remain; Ms. von der Leyen said the two sides agreed to further negotiations to fight a global steel glut, reduce tariffs and establish import quotas — that is, set amounts that can be imported, often at a lower rate. Mr. Trump said pharmaceuticals were not included in the deal. Ms. von der Leyen said the pharmaceuticals issue was 'on a separate sheet of paper' from Sunday's (July 27, 2025) deal. Where the $600 billion for additional investment would come from was not specified. And Ms. von der Leyen said that when it came to farm products, the EU side made clear that 'there were tariffs that could not be lowered,' without specifying which products. What's the impact? The 15% rate removes Mr. Trump's threat of a 30% tariff. It's still much higher than the average tariff before Mr. Trump came into office of around 1%, and higher than Mr. Trump's minimum 10% baseline tariff. Higher tariffs, or import taxes, on European goods mean sellers in the U.S. would have to either increase prices for consumers — risking loss of market share — or swallow the added cost in terms of lower profits. The higher tariffs are expected to hurt export earnings for European firms and slow the economy. The 10% baseline applied while the deal was negotiated was already sufficiently high to make the European Union's executive commission cut its growth forecast for this year from 1.3% to 0.9%. Ms. Von der Leyen said the 15% rate was 'the best we could do' and credited the deal with maintaining access to the US market and providing 'stability and predictability for companies on both sides.' What is some of the reaction to the deal? German Chancellor Friedrich Merz welcomed the deal, which avoided 'an unnecessary escalation in transatlantic trade relations" and said that 'we were able to preserve our core interests,' while adding that 'I would have very much wished for further relief in transatlantic trade.' The Federation of German Industries was blunter. "Even a 15% tariff rate will have immense negative effects on export-oriented German industry," said Wolfgang Niedermark, a member of the federation's leadership. While the rate is lower than threatened, "the big caveat to today's deal is that there is nothing on paper, yet," said Carsten Brzeski, global chief of macro at ING bank. 'With this disclaimer in mind and at face value, today's agreement would clearly bring an end to the uncertainty of recent months. An escalation of the US-EU trade tensions would have been a severe risk for the global economy," Mr. Brzeski said. 'This risk seems to have been avoided.' What about car companies? Asked if European carmakers could still sell cars at 15%, Ms. von der Leyen said the rate was much lower than the current 27.5%. That has been the rate under Mr. Trump's 25% tariff on cars from all countries, plus the preexisting U.S. car tariff of 2.5%. The impact is likely to be substantial on some companies, given that automaker Volkswagen said it suffered a $1.5 billion hit to profit in the first half of the year from the higher tariffs. Mercedes-Benz dealers in the US have said they are holding the line on 2025 model year prices 'until further notice.' The German automaker has a partial tariff shield because it makes 35% of the Mercedes-Benz vehicles sold in the U.S. in Tuscaloosa, Alabama, but the company said it expects prices to undergo 'significant increases' in coming years. What were the issues dividing the two sides? Before Mr. Trump returned to office, the U.S. and the EU maintained generally low tariff levels in what is the largest bilateral trading relationship in the world, with some USD 2 trillion in annual trade. Together, the U.S. and the EU have 44% of the global economy. The U.S. rate averaged 1.47% for European goods, while the EU's averaged 1.35% for American products, according to the Bruegel think tank in Brussels. Mr. Trump has complained about the EU's 198 billion-euro trade surplus in goods, which shows Americans buy more from European businesses than the other way around, and has said the European market is not open enough for U.S.-made cars. However, American companies fill some of the trade gap by outselling the EU when it comes to services such as cloud computing, travel bookings, and legal and financial services. And some 30% of European imports are from American-owned companies, according to the European Central Bank.


Mint
13 minutes ago
- Mint
Breakout stocks to buy or sell: Sumeet Bagadia recommends five shares to buy today — 28 July 2025
Breakout stocks buy or sell: The Indian stock market extended its losing streak for a second consecutive session on Friday, July 25, as selling pressure persisted. Benchmark indices — the Sensex and Nifty 50 — posted significant losses, with mid- and small-cap stocks tumbling by up to 2 per cent. During the session, the Sensex dropped 786 points, nearly 1 per cent, to hit an intraday low of 81,397.69, while the Nifty 50 declined 1 per cent to reach 24,806.35. At the close, the Sensex had fallen 721 points, or 0.88 per cent, to settle at 81,463.09, and the Nifty 50 finished 225 points lower, or 0.90 per cent down, at 24,837. Sumeet Bagadia, Executive Director at Choice Broking, believes that Indian stock market sentiment has turned weak as the Nifty 50 index has slipped below the 50-DEMA support of 24,900. Speaking on the outlook of Indian stock market, Bagadia said, ' The key benchmark index may try to test 24,700 to 24,650 levels. However, the next crucial support for the 50-stock index is placed at 24,500. On the upper side, 25,050 may act as crucial hurdle. So, one should maintain stock-specific approach and look at those stocks that are looking strong on the technical chart. Looking at breakout stocks can be a good option." 1] Hubtown: Buy at ₹ 315.75, target ₹ 340, stop loss ₹ 305; 2] Home First Finance Company India: Buy at ₹ 1479, target ₹ 1600, stop loss ₹ 1425; 3] Nilkamal: Buy at ₹ 1796.8, target ₹ 1920, stop loss ₹ 1730; 4] Jagsonpal Pharmaceuticals: Buy at ₹ 263.3, target ₹ 285, stop loss ₹ 255; 5] Le Travenues Technology: Buy at ₹ 219.88, target ₹ 240, stop loss ₹ 212. Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.


Mint
13 minutes ago
- Mint
Stocks to buy on 28 July—recommended by leading market experts
On Friday, Nifty 50 declined 0.9%, closing at 24,837, its lowest level in a month, as persistent selling in IT and midcap stocks dragged the index lower. This marked the fourth consecutive weekly loss for the benchmark, making it the longest losing streak of the year so far. Market sentiment remained weak throughout the session, with the index failing to hold above its key support levels. IT stocks were the major laggards, reflecting concerns over global demand and margin pressures, while midcaps saw broad-based profit booking. On the other hand, certain PSU banks and pharma stocks showed relative strength, offering some cushion to the broader market. Here are the best stock picks for today, recommended by leading market experts. Best stock recommendations for today by MarketSmith India Three stocks to buy as recommended by Ankush Bajaj Best stocks to buy today, recommended by NeoTrader's Raja Venkatraman PUNJABCHEM: Buy CMP and dips to ₹1,260 | Stop: ₹1,250 | Target: ₹1,460-1,520 AUTOAXLES: Buy CMP and dips to ₹1,860 |Stop: ₹1,845 | Target: ₹2,075-2,130 GREENPANEL: Buy CMP and dips to ₹302 | Stop: ₹298 | Target: ₹355-370 MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. Trade name: William O'Neil India Pvt. Ltd. (Sebi Registered Research Analyst Registration No.: INH000015543) Ankush Bajaj is a Sebi-registered research analyst. His registration number is INH000010441. Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223. Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors. Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.