Pharma Stocks Drag Markets Lower as Trump Threatens 100% Tariff on Drugs
Mumbai, September 27 — Indian stock markets slipped into the red on Friday, extending losses for the fifth consecutive session, as weakness in the pharmaceutical and IT sectors weighed heavily on benchmark indices. Sentiment soured after former US President Donald Trump announced plans for a sweeping 100% tariff on branded pharmaceutical imports, rattling global investors.
Benchmarks Under Pressure
At 9:24 am, the S&P BSE Sensex was trading 240.39 points lower at 80,919.29, while the NSE Nifty50 slipped 86.30 points to 24,804.55. Broader market indices mirrored the weakness, with both midcap and smallcap segments facing selling pressure.
This decline marked the fifth straight day of losses, highlighting the fragile investor sentiment amid global uncertainty, persistent foreign capital outflows, and concerns over sector-specific headwinds.
Pharma Stocks Lead the Fall
The Nifty Pharma index was the worst performer of the day, plunging 2.45%, as heavyweight stocks like Sun Pharma, Cipla, and Dr. Reddy’s Laboratories declined sharply. The trigger came from Trump’s announcement of 100% tariffs on branded pharmaceutical imports, raising fears of escalating trade frictions and regulatory hurdles for drugmakers.
Although India is largely known as a hub for generic drug exports, the news rattled markets. Analysts noted that while branded drug tariffs may not directly impact Indian firms in the short term, the concern is whether generic drugs could become the next target in Trump’s tariff agenda.
IT Stocks Continue to Struggle
Adding to the market woes, the Nifty IT index extended its losing streak. Major tech names such as Infosys, Wipro, Tech Mahindra, and HCLTech were among the top laggards, dragged down by a mix of weak global cues and investor caution over US policy shifts that may impact outsourcing demand.
Expert Views on Tariff Impact
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented,
“President Trump’s tantrums with tariffs are resuming with new imposts on patented and branded drugs. India, being an exporter of generic drugs, is unlikely to be impacted by this particular move. But the worry is that perhaps the next target could be generics, which would have deeper consequences. For now, this is more of a sentimental blow to pharmaceutical stocks.”
He further explained that Trump’s trade strategy appears to have shifted from being country-specific to product-specific, which could prolong market uncertainty. However, he noted that eventually, inflationary pressures in the US might force policymakers to reassess such measures.
Technical Outlook and Market Strategy
From a technical perspective, Anand James, Chief Market Strategist at Geojit Financial Services, observed that the Nifty is hovering near its 20-day simple moving average (SMA).
“If a pullback emerges, the index could attempt to reclaim 25,080 levels. However, if upside remains capped, bears may retain control, extending the downside target to 24,680,” he said.
Meanwhile, foreign institutional investor (FII) outflows continued to weigh on domestic equities. Persistent selling by FIIs has added to volatility, with analysts advising caution.
Despite the bearish undertone, experts believe the current phase of weakness could present buying opportunities. “Investors should use dips to accumulate high-quality, domestically-driven stocks that are less vulnerable to global shocks,” Vijayakumar suggested.
Outlook Ahead
Going forward, markets are expected to remain volatile, driven by a mix of global trade tensions, US monetary policy signals, and domestic earnings trends. With Trump’s aggressive tariff stance adding a fresh layer of uncertainty, sector-specific corrections — especially in pharma and IT — may continue in the near term.
For long-term investors, however, analysts emphasize that India’s consumption-driven growth story remains intact, offering scope to build positions selectively even amid short-term turbulence.
