Sensex down 300 pts, Nifty at 23,250 as Trump tariffs trigger fall in IT stocks; broader markets outshine

Sensex down 300 pts, Nifty below 23,300 as Trump tariffs trigger fall in IT stocks; broader markets gain

The benchmark Sensex and Nifty settled lower on Thursday, dragged down by a sharp selloff in IT, auto, metal and oil & gas stocks after the United States imposed a 27 percent reciprocal tariff on India.

However, gains in banking, pharmaceutical and broader markets helped limit the downside.

Sensex declined by 322.08 points or 0.42 percent to close at 76,295.36. During the session, it plunged 809.89 points or 1.05 percent to hit an intraday low of 75,807.55.

The broader NSE Nifty fell 82.25 points or 0.35 percent to settle at 23,250.10. The index declined by 186.55 points or 0.79 percent to a low 23,145.80 in early trade but later pared some losses.

Despite the weakness in frontline indices, the broader market outperformed, with the Nifty Midcap 100 and Smallcap 100 indices rising nearly 0.5 percent, shrugging off the broader selloff.

"The Nifty index opened lower in response to the US tariff announcements but saw some recovery due to resilience in select heavyweight stocks. This helped trim losses in early trades, leading to a range-bound session," Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

Tata Consultancy Services, HCL Technologies, Tech Mahindra, Infosys, Tata Motors, Bajaj Finance, Kotak Mahindra Bank, Mahindra & Mahindra, Bharti Airtel and Maruti Suzuki India, Tata Steel were the major laggards.

IT stocks hit hard

The Nifty IT index plunged 4 percent intraday, leading the losses among sectoral indices, as investors reacted to the tariff announcement by US President Donald Trump.

IT majors Infosys, TCS, and HCL Technologies were among the top laggards, with analysts expecting a near-term impact on revenue.

"We anticipate a sequential revenue decline for large Indian IT service firms due to seasonality, fewer billing days, and a slight dip in demand," said Sumit Pokharna, VP - Fundamental Research, Kotak Securities.

He added that the weakening US economy and macroeconomic concerns could weigh on Q4FY25 earnings and FY26 outlook.

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Chemical stocks under pressure

Shares of domestic chemical manufacturers also took a hit after the US imposed the 27 percent reciprocal tariff on India. The move is expected to dent Indian exports and squeeze profit margins. The sector had been paying an import duty of 3.5 percent at present, making the sudden jump a significant challenge for exporters.

Pharma bucks the trend

Pharmaceutical stocks, however, emerged as bright spots after the White House exempted pharmaceutical products from the tariff hike. The Nifty Pharma index surged up to 3 percent, with IPCA Labs, Sun Pharma, and Lupin leading the gains, rising up to 5 per cent.

VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, "The exemption for Indian pharmaceutical exports is a positive development. Even in a weak market, domestic consumption-driven sectors will be viewed as safe havens by investors."

Textile stocks also outperformed as the Indian textile and apparel sector is among those with the largest exposures to the U.S. However, these stocks saw sharp gains in trade, as the latest round of tariffs may help Indian exports get more competitive compared to Asian peers.

Despite near-term concerns, analysts believe that India will successfully navigate the tariff challenge and could even benefit from the impact on its Asian peers. Global brokerage Bernstein noted that India's position in global trade remains strong and could gain from the harsher tariffs imposed on Asian peers.

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