When volatility hits, investors look for safe havens.
In the aftermath of US president Donald Trump tariff announcements last week, trillions of US dollars were wiped off global stock markets.
But dairy majors saw notable gains, likely as a result of investors seeking more secure investment options.
Europe-headquartered Danone (+10.10%), Nestlé (+7.26%) and Savencia (+19.61%) posted their biggest gains in six months on Friday, April 4.
Netherlands/UK-based Unilever also rose in the first week of April by 4.44%.
Stocks of Canada-based Saputo rose 2.32% from March 31 to April 3, but are down -9.98% over the six-month period.
Chinese dairy majors Yili and Mengnui have not followed the same upward trend, though Yili stocks are trending up (+1.62%) since April 3 (mostly flat to negative over the past 5 days) and Mengnui’s are 16.39% up in the year to date.
On April 6 (Monday), the global equity market selloff continued as US president Donald Trump held firm on his decision to impose tariffs that would likely have major impact on trade globally.
The stocks of EU-headquartered Danone, Nestlé and Savencia have seen most of last week’s gains wiped out as investors continue to evaluate their options.
Tariffs a ‘significant risk’
International Monetary Fund (IMF) MD Kristalina Georgieva said on Friday that the agency was “still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth”.
“It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” she added.
In January, the IMF projected global economic growth to remain below the historic average, at 3.3% this year and next. Global headline inflation is expected to decline to 4.2% in 2025 and to 3.5% in 2026.
“The overall picture [on growth], however, hides divergent paths across economies and a precarious global growth profile,” the IMF said in its latest economic outlook update.
Economic growth in the US is slated for 2.7% in 2025 ‘reflecting strong wealth effects, a less restrictive monetary policy stance, and supportive financial conditions. A robust labor market and accelerating investment were among other signs of strength, IMF said.
World trade volume estimates are forecast to decrease in 2025/26 over trade policy uncertainty ‘which is likely to hurt investment disproportionately among trade-intensive firms’ but its impact was ‘expected to be transitory’.
Tariffs were identified as major risk factors to the outlook in January. “An intensification of protectionist policies, for instance, in the form of a new wave of tariffs, could exacerbate trade tensions, lower investment, reduce market efficiency, distort trade flows, and again disrupt supply chains. Growth could suffer in both the near and medium term, but at varying degrees across economies,” IMF concluded.