US President Donald Trump’s fresh tariffs brought some unexpected stock winners to the fore in Asia, even as equity markets tumbled across the region.
Pharmaceutical firms in India, defence manufacturers in South Korea and Malaysian glove-makers are among sectors bucking the trend on Thursday, as the regional equity benchmark slumped as much as 1.7% to its lowest level since Feb 4.
Trump said he will impose a baseline tariff of 10% on imports into the US and slap additional duties on countries with large trade imbalances. Traders rushed to hunt for potential winners, with select items being excluded from additional levies and some industries benefiting from stricter penalties on competitors.
Pharmaceuticals
India’s pharma stocks led a rally in Asian drugmakers after they were unexpectedly exempt from the duties. The MSCI index tracking Asian healthcare was the only sectoral gauge to advance. Shares of Sun Pharmaceutical Industries and Lupin jumped as drugs are among the nation’s biggest exports to the US.
Korean contract drug manufacturer Samsung Biologics also rallied.
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Malaysian glove producers
A higher levy on China brightened prospects for Malaysia’s glove manufacturers as it widened the tariff differential between the competitors. Chinese gloves exported to the US are now subject to a total levy of 104%, according to RHB Investment Bank. Supermax Corp. and Hartalega Holdings Bhd. advanced.
Korean defence stocks
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Expectations of heightened geo-political tensions boosted defence stocks in Korea. “As the world is going through a reversal of free trade, the likelihood of geopolitical tension will only increase in the longer term,” said Jung In Yun, CEO at Fibonacci Asset Management Global.
Hanwha Aerospace and Korea Aerospace Industries were among the gainers.
Gold producers
Shares of gold producers rose after the metal hit a record high as tariffs stoked fears of a global economic slowdown. Bullion was one of the few commodities exempted from the duties, according to a White House factsheet.
In Australia, Ramelius Resources, De Grey Mining were among advancers.
In Hong Kong, Zhaojin Mining Industry and Zhongjin Gold gained.
India textiles
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Textile stocks in India rose on bets higher tariffs on competitors such as Vietnam, Bangladesh and China will help the country’s exporters gain market share.
Shares of Vardhman Textiles and KPR Mill jumped.
Vietnam’s exports to the US will attract a 46% tariff, while the levy is 37% for Bangladesh, compared with 26% for India.
