Market Wrap: SENSEX plunges 733 points, NIFTY ends below 24,700 dragged down by IT, pharma shares

The Indian equity benchmarks fell for sixth straight session on Friday, September 26, on the back of a broad-based selling pressure. Investor sentiment took a knock after US President Donald Trump threatened fresh tariffs on pharmaceutical products.

The SENSEX fell as much as 827 points and NIFTY50 index touched an intraday low of 24,629. The SENSEX ended 733 points lower at 80,426 and NIFTY50 index dropped 236 points to close at 24,655.

In the last six trading session, the SENSEX has dropped as much as 2.78% and NIFTY50 index has plunged 2.75%.

Here are key factors behind Friday's fall

Investor sentiment took a knock after President Trump on Thursday said that he will impose 100% import tariffs on pharmaceutical drugs, 50% on kitchen cabinets and bathroom vanities, 30% on upholstered furniture and 25% on heavy trucks starting on October 1.

Trump said on Truth Social that the pharmaceutical tariffs would not apply to companies that are building manufacturing plants in the United States, which he defined as either “breaking ground” or being “under construction.” It was unclear how the tariffs would apply to companies that already have factories in the US.

India is one of the major exporters of pharma products to the US and the latest threat of tariff comes after Trump announced 50% tariffs on Indian exports to US last month and raising H-1B visa fees.

In 2024, America imported nearly $233 billion in pharmaceutical and medicinal products, according to the Census Bureau. The prospect of prices doubling for some medicines could send shock waves to voters as health care expenses, as well as the costs of Medicare and Medicaid, potentially increase, news agency AP reported.

India exported pharmaceutical products worth $10.5 billion to US in last financial year.

Selling pressure was broad-based as all the sectoral gauges compiled by the National Stock Exchange ended lower led by NIFTY IT index's 2.4% fall. NIFTY Pharma, Healthcare, PSU Bank, Consumer Durables, Auto, Bank and Financial Services indices also fell between 1%-2%.

Gauge of fear on the NSE, NIFTY India VIX spiked by 6.67% to 11.5.

Broader markets underperformed their larger peers as NIFTY Midcap 100 index tumbled 2.05% and NIFTY Smallcap 100 index plunged 2.26%.

Mahindra & Mahindra was top loser in the 30-share SENSEX. The stock fell 3.71% to close at ₹3,397. Eternal, Tata Steel, Bajaj Finance, Infosys, Asian Paints, Sun Pharma and Tech Mahindra also fell between 2.4%-3.4%.

On the flipside, Larsen & Toubro, Tata Motors, ITC and Reliance Industries were among the notable gainers.