Indian equity markets opened sharply lower on Wednesday, with the BSE Sensex dropping 611.02 points (0.79%) to 76,859.09 and the Nifty50 slipping below the 24,050 level in early trade, according to The Times of India. The broad-based sell-off was driven by a slump in pharmaceutical stocks following US President Donald Trump's announcement of a phased tariff plan on imported generic medicines, coupled with elevated crude oil prices and selling in banking stocks.
Pharma Stocks Hit by US Tariff Plan
The Nifty Pharma index dropped nearly 2% in early trade, with Sun Pharmaceutical Industries, Cipla, Dr Reddy's Laboratories, Lupin and Aurobindo Pharma emerging among the biggest losers. The stocks declined by around 2-2.5% in opening trade. The sell-off followed Trump's announcement that imported generic medicines would remain tariff-free for two years, after which they would face 100% tariffs for one year, followed by 200% tariffs thereafter. The move is part of a broader push to boost pharmaceutical manufacturing in the United States, triggering concerns over the sector's export outlook.
Banking Stocks Drag
From the Sensex pack, InterGlobe Aviation, Axis Bank, State Bank of India, Sun Pharma, Adani Ports, UltraTech Cement, HDFC Bank and ICICI Bank were among the major laggards. HDFC Bank extended losses for a second straight session, with the stock declining over 2% on Tuesday after its June-quarter earnings failed to impress investors. The two-day decline has wiped out ₹89,635.73 crore from the stock's market capitalisation, settling at ₹761.45 on both the BSE and NSE. On the positive side, Titan, Eternal, Maruti and Asian Paints were among the winners.
Crude Oil and Geopolitical Tensions
Elevated crude oil prices and persistent geopolitical tensions tempered risk appetite in the markets. Brent crude, the global oil benchmark, quoted 1.15% higher at USD 92.06 per barrel and later traded at $92.40 a barrel (up 1.53%). US West Texas Intermediate (WTI) crude gained 1.38% to $85.50 a barrel. The gains came after both benchmarks ended Tuesday at their highest closing levels in around five weeks. Concerns over the security of oil shipments through the Red Sea and Strait of Hormuz continue to support crude prices, with Houthi threats against shipping and ongoing US-Iran hostilities keeping a geopolitical risk premium in the market, according to forex traders.
Currency and Global Markets
The Indian rupee depreciated 11 paise to 96.36 against the US dollar in early trade, as demand for the safe-haven greenback increased amid geopolitical uncertainties. In Asian markets, South Korea's KOSPI jumped 5.16%, while Japan's Nikkei 225 gained 1.9% and Shanghai's SSE Composite traded higher. Hong Kong's Hang Seng index quoted lower. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.2% in early trade. US equity futures edged lower, with S&P 500 e-mini futures down 0.1%.
| Indicator | Value | Change |
|---|---|---|
| BSE Sensex | 76,859.09 | -611.02 pts (-0.79%) |
| Nifty50 | <24,050 | Not specified |
| Nifty Pharma | -2% (approx.) | -2% |
| Brent Crude | $92.40/bbl | +1.53% |
| USD/INR | 96.36 | +0.11 (rupee weaker) |
For investors and analysts, the key risks to monitor include the prolonged impact of US tariff policy on Indian pharma exports, the trajectory of crude oil prices amid Middle East tensions, and the potential for further downside in banking stocks if earnings disappoint. The next major catalysts will be corporate earnings reports and any clarity on the tariff timeline from the US administration.
Sources:
