Sensex, Nifty 50 end lower but outshine Asian peers as Trump tariffs hit markets; pharma stocks shine

Stock market today: Indian markets ended Thursday's session, April 3, lower, but outperformed most Asian peers, as the 26% duty, announced by the Donald Trump administration on Tuesday, on Indian exports, made it one of the least-tariffed Asian exporters.

The major relief came as Trump excluded tariffs on drug imports, triggering a sharp rally in domestic pharma stocks, as the sector has significant exposure to the US market.

Additionally, other sectors, such as textiles and electronics manufacturing services (EMS), gained attention as experts believe India could benefit from the relatively higher tariffs imposed by Trump on other Asian nations.

However, the reciprocal tariffs have ignited further fears that the US economy may slip into a recession, sending technology stocks south in today's trade. Other sectors, such as auto and metals, have also remained under pressure.

Indian stock market today: Nifty 50, Sensex decline over 0.35%

The Nifty 50, which started the session with sharp losses, erased most of them as the day progressed, ending at 23,243 points, down 0.38% from the previous close. Meanwhile, the Sensex closed 0.42% lower at 76,295 points.

In comparison, major Asian indices, including the CSI 300, Hang Seng, and Nikkei 225, all concluded with losses of up to 2.8%.

Despite the roller-coaster ride in frontline indices, broader markets performed well. The Nifty Midcap 100 index gained 0.26% to close at 52,186 points, while the Nifty Smallcap 100 index outperformed with a 0.58% rise, settling at 16,255 points.

US President Donald Trump, on Tuesday, announced reciprocal tariffs on 180 countries, including some of the United States’ closest allies, such as India, and its biggest rival, China.

While the White House imposed a 26% tariff on Indian exports, it announced even higher tariffs on China, Bangladesh, and Vietnam.

China is now subject to a 54% duty on its exports to the US, while Vietnam faces a 46% tariff, Bangladesh 37%, and South Korea 25%, according to a series of charts shared by the White House on social media.

This sweeping move by Trump has added another layer of uncertainty to the global economic landscape, raising concerns about supply chain disruptions, inflationary pressures, and the potential for retaliatory tariffs from affected nations.

Sectoral Performance: Pharma soars; IT stocks slump

Among the 13 major sectoral indices today, Nifty Pharma emerged as the top gainer with a rally of 2.25%, followed by Nifty PSU Bank, Nifty Media, and Nifty Consumer Durables, all gaining in the range of 0.35% to 1.94%.

On the losing side, Nifty IT was the worst-performing sector, falling 4.21%, followed by Nifty Auto and Nifty Metal, which ended the session down 1.14% and 0.82%, respectively.

Commenting on today's market performance, Vinod Nair, Head of Research, Geojit Investments, said, "The domestic market initially showed signs of recovery but ended with modest losses after the announcement of a relatively lower 26% tariff on US imports. The IT and auto sectors experienced selling pressure due to US slowdown concerns and disruptions in the supply chain. Conversely, pharmaceutical stocks benefited from being exempt from the tariffs."

"Nonetheless, robust domestic macroeconomic data and lower crude oil prices aided the broader market performance. Although the tariff presents short-term challenges, India's economic resilience and bilateral trade agreement may help mitigate the overall impact," he further added.

Technical Outlook

Rupak De, Senior Technical Analyst at LKP Securities, said, "The Nifty opened lower following weak global cues but recovered immediately. Sentiment remains strong as the Indian market showed resilience despite weak global equity trends led by Trump's tariffs. Short-term support is placed at 23,100, and as long as the Nifty stays above this level, the trend is likely to remain strong. On the higher end, it may move towards 23,430, and a decisive move above this level could trigger a stronger rally."

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.