Us-china trade: The trade deal between American and China has been agreed. At present, the US has reduced the tariff from 145 per cent to 30 per cent for 90 days. At the same time, China will also reduce the tariff to 10 percent. The trade deal between US-China is on the verge of completion. Under this deal, both countries will reduce tax on products implemented from April 8-9. Will change the additional tariffs applied on the US. The US will reduce the tariff imposed on China. Additional tariffs imposed on the US will be reviewed. China will also cut additional Ad Valorem rate. China will reduce the additional Ad Valorem rate to 10 percent.
If you look at the trade between US-China, then China has a export of $ 143.5 billion to China. At the same time, US has an export of $ 439 billion from China. Talking about the trade deal, Dow Futures have a gain of 1000 points. At the same time, Brent crude has again gone over $ 66. Gold has come out of fast selling and it has come down about 3 percent.
The trade deal between the US and China will reduce the possibility of recession in the US and many sectors can get boost. IT and metal included in the sector that can benefit from this deal. The shares of these sectors have increased strongly in the hope of positive impact on the IT and metal sector of this deal. First let’s take a look at the situation of this sector.
The fourth quarter results of IT service companies have been weak. IT companies have also reduced guidance and have said to delay in project ramp-up. In some vertical, there is cautious about expenses. The IT has been a cautious view on the IT due to tariff uncertainty in the US. Outlook of IT spending in Telecom, High-Tech and Healthcare is mixed. At the same time, IT spending of retail and manufacturing is weakness in outlook.
US and China trade deal impact
The US and China trade deal will reduce the possibility of recession in the US. IT spending will increase in retail, high-tech and manufacturing. Hiring is expected to increase in the IT sector.
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Kotak’s opinion on IT
Kotak is of the opinion on IT stocks that the risk-reliever in IT services is balanced. IT is possible for the benefit of falling rupee in a short period. Many companies have signed a good deal. They will get good benefit from this.
Light glow in metal shares
Metal stocks are also seen loud glow. The Metal sector has gained momentum due to the US-China trade deal. This deal expects stability in commodity prices. This is expected to increase copper and aluminum demand further. Steel prices can remain stable due to decrease in the US fear.
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