The Indian stock markets faced a sharp sell-off on September 26, 2025, after U.S. President Donald Trump imposed a 100% tariff on pharmaceutical products imported into the United States. Pharma stocks bore the brunt of the fall, triggering panic across Dalal Street. In this post, we’ll explain why Indian markets fell today, which stocks were hit hardest, what investors should do, and the outlook for the domestic markets next week.
👉 If you want to stay updated on the latest stock market news and happenings, do check our weekly blog posts here
Why Indian Stock Markets Fell Today
Trump’s Tariff Announcement
- Trump announced a 100% tariff on branded and patented drugs effective October 1, 2025, unless drug makers build manufacturing plants in the U.S.
- While generics are not directly impacted for now, uncertainty triggered heavy selling.
- The move could strain India-U.S. trade ties, leading to broader trade challenges.
Market Reaction
- Sensex slipped over 700 points.
- The Nifty 50 fell by ~0.95%.
- Nifty Pharma Index dropped over 2.15%.
Pharma Stocks That Fell Sharply Today
- Wockhardt – down ~9%
- Sun Pharma – down ~3.4%
Dr Reddy’s, Biocon, Cipla, Glenmark, Zydus Lifesciences – all fell between 2–5%
What Investors Should Do Now
✅ Stay Calm – Avoid Panic Selling
Markets often overreact to global headlines. Avoid knee-jerk exits.
✅ Reassess Pharma Exposure
- Reduce exposure to companies with high U.S. branded drug dependency.
- Favor generic-focused companies or those with a U.S. manufacturing presence.
✅ Diversify Across Sectors
Rotate into defensive sectors, such as FMCG, banking, or domestic consumption stocks.
✅ Keep Liquidity
Maintain cash positions to capitalize on dips if clarity emerges.
Outlook: Impact on Domestic Markets Next Week
A. Continued Volatility & Sectoral Divergence
Markets are likely to remain volatile as participants digest further details. Pharma and export/reliant sectors may stay under pressure, while defensive and domestic sectors might outperform.
B. Broader Spillover Effects
- The negative sentiment in pharma could spill into IT, chemical, API (active pharmaceutical ingredients), and export-linked names.
- If the U.S. or India reciprocates with trade measures, the ripple could reach industrial, chemical, and manufacturing stocks.
C. Foreign Institutional Investor (FII) Flows
Global fund flows may tilt away from emerging markets or “risky” Indian sectors. That could magnify downward pressure.
D. Policy Response & Government Intervention
Any diplomatic countermeasures, trade negotiations, or shielding by India’s government could stabilize sentiment. The Ministry of External Affairs already says it is “closely monitoring” the new tariffs. mint+1
E. Rebound or Relief Leg?
If the U.S. offers exemptions, phased implementations, or renegotiates terms, markets may stage a relief rally.
F. Focus on Macro & Global Cues
Next week, global cues (U.S. bond yields, interest rates, dollar strength) will play an outsized role in direction.
Conclusion
The sharp fall in Indian stock markets today highlights how sensitive Dalal Street remains to global policy shocks. While Trump’s 100% tariff on pharma imports has rattled investors, the broader impact may be limited given India’s strength in generics. Still, volatility is likely to persist, especially in pharma and export-driven sectors. For investors, the key is to stay calm, diversify portfolios, and monitor policy updates closely. In uncertain times like these, disciplined investing, sectoral balance, and patience will separate successful investors from panic sellers.