Is it a good time to buy stocks? Chris Wood of Jefferies answers

A total U-turn on tariffs by US President Donald Trump could be the biggest potential catalyst for global equities, especially China and US, suggested Christopher Wood, global head of equity strategy at Jefferies in his recent note to investors, GREED & fear.

 

On the other hand, the biggest risk to China equity markets, he believes, is a delisting of US-listed Chinese ADRs, which can result in a buying opportunity across global equity markets as investors would look to exit China (on possibility escalation in trade war between the US and China) and invest elsewhere.  

 

Though such a move is unlikely as things stand, Wood does not rule out the possibility just yet.

 

“This (Washington delisting of US-listed Chinese ADRs) is an extremely unlikely but clearly nothing is impossible. Any such delisting action would be a massive buying opportunity for the rest of the world, including European investors, who will not follow the US in the context of the current Trump administration,” Wood wrote.

 

With US stocks trading at nearly 19.2x forward earnings, global investors, Wood suggested, should continue to reduce positions in favour of Europe, China and India. 

 

“That does not mean that Trump cannot generate new positive momentum by the approach already suggested, namely dramatically scaling back tariffs and refocusing on tax cuts and deregulation, but it does mean that the base case remains US underperforming other stock markets in the context of a weakening US dollar and a bearish Treasury bond market,” Wood wrote. 

 

Within the Asian region, the lack of evidence of accelerating stimulus has deprived the 'China equity story' of a near-term catalyst, Wood said, though he is still comfortable with Chinese equities both from a valuation standpoint and from a diversification standpoint since China is significantly uncorrelated to Wall Street-correlated global equities. 

US China trade

 

As a strategy, Wood has favoured European equities over Japanese so far this year on the view that there is an identifiable near-term macro catalyst in the form of the pending German fiscal revolution. 

 

"The issue now for the new German coalition government is to get on with implementing the expansionary fiscal agenda. This should certainly be the priority of Berlin and Brussels," Wood wrote in GREED & fear.

 

Where does India stand?

 

Meanwhile, most global markets have bounced sharply from their April lows as Donald Trump pushed back tariff implementation by 90-days.

 

Back home, the Sensex rebounded around 10 per cent from April 2025 lows to close 3.7 per cent higher. The Nifty Midcap 100 index gained 5 per cent and outperformed the frontline indices, the Sensex and the Nifty 50. READ ABOUT IT HERE

 

Going ahead, a dollar depreciation may improve risk appetite for emerging market (EM) assets, and specifically India is in a better position, suggest analysts.  

 

Positive triggers for the Indian markets, said Jitendra Gohil, chief investment strategist at Kotak Alternate Asset Managers, include Reserve Bank of India's (RBIs) easing stance on liquidity and interest rates, trade deal with the US, falling oil prices, pick up in credit growth and economic momentum.

 

“The Nifty is likely to remain range-bound within 22,000 to 26,000 (Nifty) levels during the year. Negative triggers include geopolitical tensions and faltering global growth partly offset by stimulus measures by global central banks and fiscal expansion in China and Europe,” he said.