Recent turbulence in U.S. Treasury bills, triggered by fiscal policy concerns and complex trading strategies, has shaken the bond market. The unwinding of leveraged "basis trades," reliant on stable bond prices, led to widespread sell-offs. Investors are closely monitoring U.S. Treasury yields, the U.S. dollar relationship, and potential Federal Reserve intervention for signs of further instability.

Sunny Agrawal of SBI Cap Securities advises gradual capital deployment over the next six months, targeting CY26 and CY27 for better returns. He favors domestic consumption stories, particularly BFSI, frontline banks, and select auto segments like tractors. While cautious on IT and metals due to tariff uncertainties, he sees potential in aluminium and specific tyre companies like Ceat.

These stocks are viewed as safer investments, especially when the broader market shows significant swings.

President Trump announced potential tariffs on imported pharmaceuticals, impacting countries like India, a major supplier to the US drug market. In 2024, US pharmaceutical imports reached $213 billion, with India providing over 45% of generic drugs and 15% of biosimilars. The move aims to bolster domestic production, raising concerns for Indian pharma companies reliant on US revenue.

Citi has downgraded US equities to Neutral due to high valuations and tariff pressures, while maintaining an Overweight rating for India. India s strong domestic fundamentals and relative insulation from global trade tensions drive this positive outlook. The UK was upgraded to Overweight, while Australia remains an Underweight.

LGT Wealth s CIO-Equities, Chakri Lokapriya, suggests a multicap approach, highlighting value in mid and small-caps after recent market volatility. He favors domestic-facing companies like Tata Consumer and Voltas, financials benefiting from government spending, and industrials. Cement companies like UltraTech are also promising. While IT faces discretionary spending uncertainty, chemicals offer an advantage due to favorable tariffs compared to China.

NHPC shares are in focus following the commencement of commercial operations for a 107 MW solar power capacity in Rajasthan. Additionally, trial runs for all units of the Parbati-II HE Project in Himachal Pradesh have been successfully completed, with commercial operations already declared for three units earlier this month.

RIL shares: Reliance Industries has posted a 17.58% drop over the past year. On a year-to-date (YTD) basis, the stock is down 0.19%. Over the last six months, it has declined by 11.07%, while the three-month and one-month performances show declines of 1.86% and 2.25%, respectively.