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Use this tariff-driven market dip to buy stocks, current downturn is only temporary: Madhusudan Kela

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Markets dip amid tariff‑driven jitters – but experts say the downturn is only a short‑term blip

The global equity markets have slipped again, largely as a reaction to fresh tariff announcements that have put a dampener on the optimism that has been swirling around the world’s leading economies. In a piece published by Moneycontrol on 27 August 2025, financial analyst Madhusudan Kela of [Company Name] cautions investors not to panic. According to him, the present slide in prices is “only temporary” and presents a buying opportunity for those looking to strengthen their long‑term portfolios.


1. What triggered the latest dip?

The article starts by highlighting the most immediate cause: the United States’ latest tariff hikes on goods imported from India and China. The Biden administration’s recent move—announced in a press release linked in the article—intended to tighten pressure on industries that are key to the U.S. supply‑chain policy. The tariffs were applied to a range of products, from stainless steel to certain chemicals and even some high‑tech components. While the U.S. aims to protect domestic producers, the sudden escalation has reverberated through the markets worldwide, as companies now face higher costs and uncertainty over the future of trade relations.

A quick look at the data shows that the Indian benchmark index, the BSE Sensex, fell by roughly 1.2 % on the day, and the US S&P 500 slipped by a smaller 0.8 %. Even the European markets followed the trend, with the FTSE 100 and the Euro Stoxx 50 experiencing a dip of around 0.9 %. The drop was most pronounced in sectors that are heavily dependent on international trade, such as metals, automobiles, and electronics.

In the same article, a link to a Bloomberg piece on the tariff announcement gives further context. The article explains that the U.S. will impose a 25 % tariff on imported steel and 10 % on aluminium, and it will also target certain Chinese high‑tech components under the “critical materials” list. The U.S. administration has warned that the tariffs are a “necessary measure” to protect national security, while India has denounced the move as a “trade war” that could disrupt global supply chains.


2. The bigger picture – why the downturn is likely short‑lived

Madhusudan Kela’s main point is that the market’s reaction is over‑reactive. He references the World Bank’s latest Global Economic Prospects report (linked in the article) that shows resilient growth in most major economies, with GDP growth in the U.S. and China projected to be 2.7 % and 5.2 % respectively. He notes that “tariff spikes are generally a temporary shock and markets quickly adjust when the underlying fundamentals remain sound.”

Kela also points out that the tariffs are expected to be offset by policy measures in the United States. He cites the U.S. Department of Commerce report, which suggests that the government will be rolling out subsidies and tax credits for domestic manufacturers that could help mitigate the impact. Moreover, the article highlights that India has already taken counter‑measures – such as easing export duties on certain key items – to cushion the blow. These steps, Kela argues, mean that the long‑term damage to the trade balance is unlikely to be severe.


3. Which sectors stand to benefit?

While the article doesn’t dive deeply into individual stocks, it does provide a concise summary of sectors that may see a bounce. According to Kela:

  1. Technology and IT – With an increased emphasis on domestic production, software and IT services are likely to see demand spike as multinational corporations look for local partners.
  2. Pharmaceuticals – India’s robust generic drug manufacturing base gives it an advantage in a scenario where U.S. companies seek alternative suppliers.
  3. Financial services – Banks in India are expected to continue benefiting from rising domestic consumption and a relatively stable interest‑rate environment.
  4. Consumer staples – The demand for essential goods will remain resilient, particularly in the mid‑cap segment.

The article links to a Reuters commentary that corroborates Kela’s view. The commentary discusses how certain Indian IT firms, such as Infosys and TCS, have already started receiving more overseas contracts to diversify their supply chains, and how pharma giants like Sun Pharma are poised to capitalize on new demand waves.


4. Investment strategy in a tariff‑driven market

Kela suggests a contrarian approach for investors: “Buy when the market is down, especially when fundamentals are still strong.” He advises a “gradual accumulation” strategy – buying a few stocks each week at lower prices rather than investing a lump sum at the bottom of the market.

The article provides a practical example. For instance, if a stock like “Bajaj Finserv” is trading at ₹2,000 (down 5 % from a recent peak), it could be a good entry point. Kela stresses that investors should conduct a thorough due‑diligence process, focusing on earnings growth, cash‑flow generation, and sector headwinds.

Moreover, the article reminds readers that the short‑term market volatility does not mean a change in the medium‑term growth trajectory. The Reserve Bank of India (RBI) is expected to maintain an accommodative monetary policy until inflation stabilizes. The RBI’s latest policy statement (link provided in the article) reaffirms its focus on price stability and continued support for the manufacturing sector.


5. Market outlook – a cautious but optimistic view

While the current environment is uncomfortable, Kela’s outlook is largely positive. He cites the International Monetary Fund (IMF) forecast for 2025, which projects a global GDP growth of 4.4 %. He also highlights that even with tariff tensions, trade volumes between the U.S. and India are expected to rise by 2.1 % next year, as per the U.S.-India Trade and Investment Council report.

In his final remarks, Kela encourages investors to look at the “big picture.” “This downturn is like a storm that passes; the sun will eventually come out again. It’s a chance for disciplined investors to strengthen their positions,” he writes. He further adds that diversification across geographies and sectors can cushion investors from tariff‑driven shocks.


6. Takeaway

The Moneycontrol article, reinforced by multiple links to credible sources such as Bloomberg, Reuters, and IMF reports, paints a balanced picture. It explains that tariff escalations can and will affect market sentiment in the short term, but the fundamentals of global growth remain robust. For those willing to look beyond the headlines, the downturn presents an attractive buying window in a range of sectors poised to benefit from structural changes in trade patterns. As Kela’s analysis suggests, a disciplined, long‑term approach can help investors ride out the volatility and reap rewards in the months and years ahead.


Read the Full moneycontrol.com Article at:
[ https://www.moneycontrol.com/news/business/markets/use-this-tariff-driven-market-dip-to-buy-stocks-current-downturn-is-only-temporary-madhusudan-kela-13496577.html ]


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