Sensex, Nifty Tumble for 6th Day as Trump's Tariff Threat Roils Markets

Indian benchmark indices plunged for the sixth consecutive session on Friday, erasing significant investor wealth amid a broad-based sell-off. The primary catalyst for this downturn was a shock announcement from former U.S. President Donald Trump regarding steep tariffs on pharmaceutical products, which particularly rattled the pharma and IT sectors.

On September 26, 2025, the 30-share BSE Sensex plunged 733.22 points, or 0.90%, to close at a three-week low of 80,426.46. During the day’s trading, it touched a low of 80,332.41. Similarly, the 50-share NSE Nifty tumbled 236.15 points, or 0.95%, to settle at 24,654.70. This sustained decline has caused the Sensex to fall by over 2,587 points in just six sessions.

Trump’s Tariff Threat Sparks Sell-Off

The main culprit behind the market mayhem was a post on the social media platform Truth Social by Donald Trump. He announced a staggering 100% tariff on “any branded or patented Pharmaceutical Product” imported into the U.S., effective from October 1, 2025. An exception was offered only for companies actively building manufacturing plants in America.

This news sent shockwaves through the Indian pharma sector, which considers the U.S. one of its largest export markets. The BSE Healthcare index was among the worst performers, dropping by 2.14%. Stocks of major pharmaceutical companies took a severe beating, with Wockhardt tanking by as much as 9.4%. Other major losers included Sun Pharma, Dr. Reddy’s Labs, Laurus Labs, and Biocon, with losses ranging from 3% to 7%.

The announcement has created significant uncertainty, as the U.S. accounts for over a third of India’s total pharmaceutical exports. While some analysts believe the immediate impact might be limited as a majority of Indian exports are generic drugs, the fear of further protectionist measures has spooked the market.

FPI Outflows and IT Sector Headwinds Add to Pressure

Adding fuel to the fire is the relentless selling by Foreign Portfolio Investors (FPIs). In September, FPIs have offloaded stocks worth over ₹13,000 crore. This takes their total selling for the year 2025 to over ₹1.4 lakh crore, putting immense pressure on the Indian market and contributing to its underperformance compared to other emerging markets.

The IT sector, another heavyweight, is also facing challenges. The recent hike in H-1B visa fees by the U.S. administration has been a major drag on IT stocks. With Indians being the largest recipients of H-1B visas, this move is expected to increase operational costs for Indian IT companies. Consequently, the Nifty IT index shed 2.3%, with giants like Tata Consultancy Services (TCS), Infosys, and Tech Mahindra seeing significant declines.

Widespread Selling Hits Broader Market

The negative sentiment was not confined to large-cap stocks. The broader market also witnessed a sharp fall, indicating widespread concern among investors. The Nifty MidCap 100 index dropped by 2.05%, and the Nifty SmallCap 100 index fell by 2.2%. The market capitalisation of BSE-listed companies saw an erosion of ₹6.73 lakh crore in a single day.

According to Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “The significant drag on the market throughout this year has been the sustained selling by FIIs. This huge underperformance and the high valuations in India has emboldened FIIs to continue selling.” He noted that a combination of negative global cues and domestic concerns is keeping investors on edge.

Key Factors for Investors to Monitor

The current market scenario calls for caution. Here are a few things to keep an eye on in the coming days:

• Developments on U.S. Tariffs: Any clarification or further announcements from the U.S. regarding the pharma tariffs will be closely watched. A potential bilateral dialogue could bring some relief.
• FPI Activity: The trend of FPI selling is a key indicator. A reversal of this trend would be a positive signal for the market.
• Upcoming Quarterly Earnings: The Q2 earnings season will provide a clearer picture of corporate health and could influence market direction.
• Nifty Technical Levels: The Nifty has breached key support levels. The next major support is seen around the 24,500 mark. Sustained trading below this level could lead to further downside.

The market is currently volatile and highly sensitive to global headlines. This is a time for careful consideration, not for panic-driven decisions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please conduct your own research before investing.