Why Did Sensex and Nifty Open Lower Amid Trump's Tariffs?
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Synopsis
On September 26, Indian benchmark indices slid down as US President Trump's tariff announcement on pharmaceutical imports sent shockwaves through the market. With foreign institutional investors continuing to sell, the implications for pharmaceutical stocks are uncertain. Will India’s generic drug exports be next on the chopping block?
Key Takeaways
- Sensex and Nifty opened lower due to US tariffs on pharmaceuticals.
- Foreign institutional investors continue to sell off equities.
- India's pharmaceutical sector may face sentiment-based challenges.
- Global economic conditions are deteriorating, impacting markets.
- Market participants are advised to stay informed and strategic.
Mumbai, Sep 26 (NationPress) The Indian benchmark indices commenced the day on a negative note on Friday, following the announcement of tariffs on pharmaceutical imports by US President Donald Trump, coupled with ongoing selling pressure from foreign institutional investors.
As of 9:25 AM, the Sensex saw a decline of 388 points, or 0.48 percent, settling at 80,771, while the Nifty dropped 119 points, also 0.48 percent, standing at 24,771.
Following Trump's declaration of tariffs that could reach as high as 100 percent on imports of branded and patented pharmaceutical drugs starting October 1, 2025, shares of Indian and other Asian pharmaceutical firms took a hit.
In addition to pharmaceuticals, President Trump also instituted a 50 percent tariff on kitchen cabinets and bathroom vanities, a 30 percent duty on upholstered furniture, and a 25 percent fee on heavy trucks.
The United States remains India’s largest market for pharmaceutical exports, accounting for 31 percent of the country’s total pharmaceutical shipments.
Analysts suggest that while India, as a key exporter of generic drugs, may not face immediate repercussions from Trump’s policies, they anticipate a potential negative sentiment affecting pharmaceutical stocks, especially if generic drugs become the next target.
The broader market indices, Nifty Midcap 100 and Nifty Smallcap 100, also experienced declines of 0.18 and 0.20 percent, respectively. Major losers on the Nifty included Cipla, Dr. Reddy's Labs, Titan Company, Asian Paints, and Bajaj Finance. In contrast, gainers included L&T, Hero MotoCorp, Hindalco, Tata Steel, and ONGC.
Among sector-specific indices, Nifty Pharma emerged as the largest loser, dropping 2.39 percent, followed by Nifty PSU Bank (down 1.11 percent) and Nifty Healthcare Index (down 2.20 percent).
From a technical standpoint, Nifty has decisively closed below the 25,000 mark, indicating a pronounced downside bias. Current resistance levels are positioned around 25,000–25,050, whereas immediate support is identified near the 24,700–24,750 range.
Overnight, US markets finished in the negative territory, with the Nasdaq falling by 0.50 percent, the S&P 500 declining by 0.50 percent, and the Dow losing 0.38 percent during the last trading session.
During the morning session, all Asian markets traded lower. China’s Shanghai index dropped 0.18 percent, Shenzhen fell 0.79 percent, Nikkei in Japan decreased by 0.43 percent, and Hong Kong's Hang Seng Index dipped 0.79 percent. Meanwhile, South Korea's Kospi plummeted by 2.52 percent.
Market analysts indicate that the global economic landscape is becoming increasingly challenging as the US economy approaches stagflation, characterized by slowing growth, rising unemployment, and escalating inflation.
On Thursday, foreign institutional investors (FIIs) offloaded equities worth Rs 4,995 crore, while domestic institutional investors (DIIs) were net buyers, acquiring equities valued at Rs 5,000 crore.
Point of View
It’s crucial to recognize the nuanced impact of global policy shifts on local markets. While the immediate market response may seem alarming, our strength lies in adaptability. India’s robust pharmaceutical sector, particularly in generics, must strategize and innovate in response to international challenges. The focus should remain on long-term growth and maintaining our market position.
NationPress
26/09/2025
Frequently Asked Questions
What caused the decline in Sensex and Nifty?
The decline was primarily triggered by US President Trump's announcement of tariffs on pharmaceutical imports, coupled with ongoing selling by foreign institutional investors.
How will these tariffs affect the Indian pharmaceutical sector?
While analysts believe the direct impact on India's generic drugs may be limited, there could be a negative sentiment affecting pharmaceutical stocks.
What was the market reaction following the announcement?
The Indian benchmark indices opened lower, with Sensex down 388 points and Nifty down 119 points.
What other industries are affected by these tariffs?
In addition to pharmaceuticals, tariffs were announced on kitchen cabinets, bathroom vanities, upholstered furniture, and heavy trucks.
What is the global economic outlook following this announcement?
Market analysts indicate that the global economic backdrop is becoming more challenging, with the US economy approaching stagflation.
