Trade tensions persist, but markets seek stability: Standard Chartered

Global markets are trying to stay steady amid rising uncertainty around trade policies, especially after US President Donald Trump announced steep new tariffs. These include a 50% duty on copper imports and a threatened 200% levy on pharmaceutical products. While India’s trade deal with the US is still pending, experts believe the focus should remain on long-term fundamentals.Fook Hen Yap, Senior Investment Strategist at Standard Chartered Bank, said the first half of the year has been dominated by trade war tensions, but investors should look beyond the noise. “We are still constructive on the environment,” he said, stating that what markets need most is consistency. “What the market wants is certainty. What the market does not like is the back and forth and uncertainty.”

He stated that businesses have already adjusted by building up inventories. The real need now is policy clarity so companies can plan better. Yap added that he believes the global economy, particularly the US, is on track to avoid a recession. “We still are in a soft-landing camp… that environment is still positive for equities.”

A key trend Yap highlighted is the weakening of the US dollar, which could benefit markets outside the US. “A weak US dollar tends to be better for equities overall, and two, it is good for equities outside of the US,” he explained, suggesting that investors diversify and focus more on Asia, excluding Japan.

Also Read: India set to gain from trade shifts, say Nomura & BNP Paribas amid US tariff uncertainty

Among Asian markets, Yap is most optimistic about China and South Korea. He said both countries offer attractive valuations and have strong policy support. “We are overweight on China and overweight on Korea,” he stated, adding that stimulus in China and post-election reforms in Korea could support market growth. He also said India remains a “core holding” thanks to its strong long-term growth story, but he currently prefers mid-cap stocks over large caps for better earnings potential.Commenting on Trump’s proposed 200% pharma tariff, Yap was sceptical. “It would be detrimental to the US itself,” he said, suggesting that the move is more about “headline wins” and attracting investment back to the US. “He’s following through with campaign promises,” Yap said, but added that politicians will become more cautious closer to the elections due to rising costs and weak consumer sentiment.

On gold, Yap said the bank holds a “neutral” view. “Gold is a core holding… helps to diversify and in a weak dollar environment, gold tends to do well,” he said, stating that central bank purchases also support gold prices.

Also Read: Milken Institute’s William Lee on why the US is reshaping trade, not retreating & where India fits in

For the entire interview, watch the accompanying video

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