With US equities at risk of Trump tariffs, Quant AMC tells investors to load up on gold, Nifty mega largecaps

Quant estimates that 69% of this correction has already played out, suggesting selective buying opportunities in sectors such as Infrastructure, Hotels & Hospitality, Pharmaceuticals, Materials, Retail, and Telecom.

A majority of the market correction in India has played out, and stocks world over have entered a month traditionally positive for equities, said the latest newsletter by Quant Mutual Fund, adding that US stocks are now at risk, with Trump’s tariff threatening to hurt global trade, which may undermine America’s supremacy in the world order.

The newsletter by the Sandeep Tandon-run fund said US equities will continue to face headwinds, with the Nasdaq likely to underperform, as the trend gets constructive for European and Chinese equities.

“April is seasonally bullish for equities, but US stocks remain vulnerable,” the note added, stating that global equities are in consolidation, rather than a full-fledged bear market.

Risks for US Economy

US President Trump’s trade tariff plan positions him as a potential winner in the ‘Grand Master Geopolitical Chess Tournament’, said the newsletter, however, the policies could ultimately weaken America's superpower status.

“The current acceleration in global geopolitics could be disastrous for global trade, potentially fueling inflation that may shake markets,” the note said.

The newsletter by Sandeep Tandon’s Quant Fund said Trump’s narratives are triggering heightened volatility, leading to concerns and doubts among US allies about America’s continued dominance in the global affairs.

The note goes on to adds that the US economy has entered a structural decline due to protectionist policies that are isolating the nation from the global economy.

The Dollar Index has experienced a significant correction, and April is historically a bearish month for the dollar, said Quant Fund, adding that its predictive models indicate a rising risk regime after the indicator hit a peak in January.

Quant AMC has advised investors to keep a close eye on global currencies and bond yields, for they will shape the macroeconomic outlook for 2025.

Crude Oil and Bitcoin – Gains Ahead?

April is typically a bullish month for crude oil as well, and Quant AMC suggests that the downside risks are minimal, with a potentially meaningful upside on cards.

Bitcoin too appears to be on an upward trend, with the cryptocurrency poised for gains till mid-April, said the newsletter. Attributing it to global uncertainties, which have positioned Bitcoin as an attractive investment for those with a higher risk appetite.

Gold’s May Shine On

International gold prices have been at all-time highs and are likely to remain firm in April, said Quant. While the fund house maintains a near-term cautious outlook on the precious metal, it sees the rally extending further before a sharp correction by Q2CY25. Quant AMC remains positive on gold on medium and longer term, and has advised investors to allocate a meaningful portion of the portfolios to the precious metal.

View on India

Indian equities have been in a corrective phase since the peak of the ‘risk off’ cycle which began in July 2024, and Quant estimates that 69% of the correction has already played out. Quant AMC’s newsletter has pointed at selective buying opportunities in Infrastructure, Hotels & Hospitality, Pharmaceuticals, Materials, Retail and Telecom.

While markets await further clarity on US President Trump’s trade policy, Quant is advising to focus on the longer-term growth strategies. The AMC said it is tilting towards large and mega largecap stocks, while selectively increasing exposure to smallcap names.

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