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Informist, Friday, Apr. 4, 2025

 

By Gopika Balasubramanium

 

MUMBAI – Benchmark indices closed sharply lower Friday, as worries about a likely recession in the US deepened after US President Donald Trump threatened to impose fresh tariffs on pharmaceutical imports. Pharma was among the very few sectors on which Trump had not announced any tariffs till Thursday. Market participants lost hope after Trump said he would impose levies on pharmas "shortly", following which the sector saw aggressive sell-off. Almost all sectors and key indices closed in the red, but fared better than several global markets. 

 

"Overall tariffs are negative for India, unless the goverment negotiates a cut in tariffs," Pravin Bokade, head of equity research at IDBI Capital Markets & Securities, said. "FY26 (2025-26, Apr-Mar) earnings estimate are at a risk due to US slowdown as IT (information technology) will be impacted."

 

Fears of a possible recession in the US could also lead to low demand for metals, which led to a sell-off in stocks related to the metal sector. IT stocks, too, tumbled on expectation of a slowdown in the US economy, as more than half of the revenue of the sector comes from this region. 

Pharma, IT, and metal stocks together hold over 19% weightage in the Nifty 50. The Nifty 50 closed 1.5% lower at 22904.45 points, breaching the psychologically important level of 23000 points. The BSE Sensex closed 1.2% lower at 75364.69 points. 

 

The sharp fall in the indices comes a day after President Trump imposed tariffs on its key trading partners, even though the Indian market was down only 0.4% Thursday. The US president imposed reciprocal tariffs on most countries across the globe, with Indian imports attracting 26% duties. Other Asian countries such as China, Vietnam, and Bangladesh face higher tariffs than India at 54%, 46%, and 37%, respectively.

 

Select index heavyweights such as HDFC Bank and ICICI Bank, which together have a 22% weightage in the Nifty 50, stood unfazed Friday even when more than 80% of the stocks in the index tumbled. Foreign investors turning net sellers in recent sessions after turning net buyers last month also weighed on sentiment.

 

"Indian markets are likely showing a soft reaction to tariffs as we have already declined in the last six months...there is valuation comfort (in India)," Bokade said. For the US, inflation could rise in the short term. In the longer term, there are a lot of "ifs" and "buts" to whether the US would manage to increase manufacturing in the country. He also said that overall cost of labour, electricity, and land is high in the US.

 

The mid- and small-cap indices in India fell more than the benchmark indices. The Nifty Smallcap 50 fell the most among these and closed 3.6% lower. These indices, which stood resilient the previous day just after Trump's tariff announcement, lost their foothold Friday.

 

Metal stocks were the worst hit Friday, with the Nifty Metal index closing a whopping 6.6% lower. There are fears that a likely global recession could lower the consumption of metals and lead to a fall in demand, Tushar Chaudhari, a research analyst at Prabhudas Lilladher, said. There could be a decline in commodity prices globally, he said.

 

Global steel players such as Vedanta, Hindalco Industries, and National Aluminium Co. will take a hit due to this, Chaudhari added. Emkay Global Financial Services also voiced similar views in its strategy report, saying there could be a significant correction in global commodity prices due to the tariffs. The brokerage said metals would be among the worst hit sectors due to a fall in prices. 

 

The Nifty Metal index dropped as low as 8386.50 points intraday, just 60 points away from its one-month low. Hindustan Copper was the worst-hit constituent and closed over 9% lower. Others such as Vedanta, Hindalco Industries, and National Aluminium Co. also closed over 8% down each.  

 

Pharmaceutical stocks were also hit severely Friday, wiping out all the gains made in the previous session. "Pharma (tariffs) be starting to come in, I think, at a level that you haven't really seen before," Trump said. Laurus Labs, Granules India, IPCA Laboratories, and Aurobindo Pharma fell 6-8%. Large-caps like Cipla, Dr. Reddy's Laboratories, and Sun Pharmaceutical Industries also closed 3-5% lower. 

 

Zydus Lifescience, Aurobindo Pharma, and Dr. Reddy's Laboratories earn 41-47% of their revenue from the US, as per a note by Geojit Investments. "...there remains a possibility of some trade barriers in the future as the US considers the pharma industry as a strategic sector and wants to promote domestic manufacturing in the medium to long run," the brokerage said.  

 

Another sector that faced selling pressure Friday was oil and gas. Shares of most companies in the sector fell after eight member nations of the Organization of the Petroleum Exporting Countries and its allies agreed to increase output by 411,000 barrels per day from May, which was higher than expected. This move by the oil cartel would increase the overall supply of crude oil, consequently making the prices to fall. The June Brent crude oil contract traded on the Intercontinental Exchange fell over 6% to $65.56 per barrel at 1620 IST. Oil and Natural Gas Corp. was among the worst-hit Nifty 50 oil constituent and closed over 7% lower. Others such as Oil India, Petronet LNG, and Indraprastha Gas also fell 5-7%. 

 

Bucking the trend, some consumer-oriented stocks and banking players gained Friday. Tata Consumer Products was the top gainer in the Nifty 50 and closed 1.6% higher. Nestle India also gained and ended less than 1% higher. Analysts said that the rise in FMCG stocks were due to their defensive nature in a weak market. These companies are dependent on domestic consumption and not on US exports, analysts said.  

 

* Of the Nifty 50 stocks, 9 rose, 40 fell, and one was unchanged 

* Of the Sensex stocks, 7 rose and 23 fell

* On the NSE, 645 stocks rose, 2,230 fell, and 71 were unchanged

* On the BSE, 1,126 stocks rose, 2,820 fell, and 130 were unchanged

* Nifty Metal: down 6.6%; Nifty Pharma: down 4%; Nifty Financial Services: up 0.2%

 

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BSE                                               NSE

Sensex: 75364.69, down 930.67 points or 1.2%      Nifty 50: 22904.45, down 345.65 points or 1.5%

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S&P BSE Sensitive Index	Nifty 50
Lifetime High: 85978.25 (Sept. 27, 2024)	: Lifetime High: 26277.35 (Sept. 27, 2024)
Record Close High: 85836.12 (Sept. 26, 2024)	: Record Close High: 26216.05 (Sept. 26, 2024)
2025 1st day close: 78507.41 (Jan. 1)	: 2025 1st day close: 23742.90 (Jan. 1)
2025 Closing High: 79943.71 (Jan. 2)	: 2025 Closing High: 24188.65 (Jan. 2)
2025 Closing Low: 72989.93 (Mar. 4)	: 2025 Closing Low: 22082.65 (Mar. 4)
2025 High (intraday): 80072.99 (Jan. 3)	: 2025 High (intraday): 24226.70 (Jan. 2)
2025 Low (intraday): 72633.54 (Mar. 4)	: 2025 Low (intraday): 21964.60 (Mar. 4)
2024 1st day close: 72271.94 (Jan. 1)	: 2024 1st day close: 21741.90 (Jan. 1)
2024 Closing High: 85836.12 (Sept. 26)	: 2024 Closing High: 26216.05 (Sept. 26)
2024 Closing Low: 70370.55 (Jan. 23)	: 2024 Closing Low: 21238.80 (Jan. 23)
2024 High (intraday): 85978.25 (Sep. 27)	: 2024 High (intraday): 26277.35 (Sept. 27)
2024 Low (intraday): 70001.60 (Jan. 24)	: 2024 Low (intraday): 21137.20 (Jan. 24)
2023 1st day close: 61167.79 (Jan. 2)	: 2023 1st day close: 18197.45 (Jan. 2)
2023 Closing High: 72410.38 (Dec. 28)	: 2023 Closing High: 21778.70 (Dec. 28)
2023 Closing Low: 59288.35 (Feb. 27)	: 2023 Closing Low: 17311.80 (Oct. 17)
2023 High (intraday): 72484.34 (Dec. 28)	: 2023 High (intraday): 21801.45 (Dec. 28)
2023 Low (intraday): 58699.20 (Jan. 30)	: 2023 Low (intraday): 17098.55 (Jan. 17)
2022 1st day close: 59183.22 (Jan. 3)	: 2022 1st day close: 17625.70 (Jan. 3)
2022 Closing High: 63284.19 (Dec. 1)	: 2022 Closing High: 18812.50 (Dec. 1)
2022 Closing Low: 51360.42 (Jun. 17)	: 2022 Closing Low: 15293.50 (Jun. 17)
2022 High (intraday): 63583.07 (Dec. 1)	: 2022 High (intraday): 18887.60 (Dec. 1)
2022 Low (intraday): 50921.22 (Jun. 17)	: 2022 Low (intraday): 15183.40 (Jun. 17)
2021 Closing High: 61305.95 (Oct. 14)	: 2021 Closing High: 18338.55 (Oct. 14)
2021 Closing Low: 46285.77 (Jan. 29)	: 2021 Closing Low: 13634.60 (Jan. 29)
2021 High (intraday): 61353.25 (Oct. 14)	: 2021 High (intraday): 18350.75 (Oct. 14)
2021 Low (intraday): 46160.46 (Jan. 29)	: 2021 Low (intraday): 13596.75 (Jan. 29)
2020 Closing High: 47751.33 (Dec. 31)	: 2020 Closing High: 13981.95 (Dec. 30)
2020 Closing Low: 25981.24 (Mar. 23)	: 2020 Closing Low: 7610.25 (Mar. 23)
2020 High (intraday): 47896.97 (Dec. 31)	: 2020 High (intraday): 14024.85 (Dec. 31)
2020 Low (intraday): 25638.90 (Mar. 24)	: 2020 Low (intraday): 7511.10 (Mar. 24)
2019 High (intraday): 41809.96 (Dec. 20)	: 2019 High (intraday): 12293.90 (Dec. 20)
2019 Low (intraday): 35287.16 (Feb. 19)	: 2019 Low (intraday): 10583.65 (Jan. 29)
2018 High (intraday): 38938.91(Aug. 28))	: 2018 High(intraday): 11760.20 (Aug. 28)
2018 Low (intraday): 32483.8 (Mar. 23)	: 2018 Low (intraday): 9951.9 (Mar. 23)
2017 High (intraday): 34005.37 (Dec. 26)	: 2017 High(intraday): 10515.10 (Dec. 26)

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End

 

US$1 = INR 85.23

 

Edited by Tanima Banerjee

 

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