Sensex, Nifty trim losses as pharma, financial stocks help offset tariff pressures

In the broader market, small-cap stocks emerged as outperformers

Indian benchmark indices, the Sensex and Nifty, continued to trade in negative territory but recovered from the day's lows during the afternoon session on April 3. Gains in the banking and pharmaceutical sectors helped offset weaknesses in the IT and auto sectors. Analysts generally believe that Indian markets will be able to navigate the tariff challenges imposed by US President Donald Trump and may even benefit from harsher tariffs imposed on other Asian counterparts.

Around noon, the Sensex was down 222 points, or 0.29 percent, at 76,395, and the Nifty was down 45 points, or 0.19 percent, at 23,287. The market breadth was positive, with approximately 2,341 shares advancing, 1,022 shares declining, and 129 shares remaining unchanged.

In the broader market, small-cap stocks emerged as outperformers, while mid-cap stocks were flat to slightly negative.

Sectorally, a mixed trend was observed. The Nifty IT index was the worst performer, declining due to concerns over a potential growth slowdown and reduced discretionary spending in light of the new tariff measures. Technology heavyweights such as TCS, Infosys, HCL Tech, and Wipro declined in the range of 2–3 percent.

Conversely, the Nifty Pharma index was the top gainer during this period, as pharmaceutical goods were exempted from Trump's new tariff orders. Sun Pharma, Divi's Lab, and Cipla gained in the range of 3–4 percent.

Analysts at Bernstein believe that India will "safely" navigate the tariff challenges and may even benefit from China's losses. They noted that while the 26 percent tariffs imposed on India seem high, two of India's major exports—IT services and pharmaceuticals—are untouched by this announcement. This positions India favorably compared to several South Asian economies that compete with India in these sectors but are facing higher tariffs.

Viram Shah, Founder & CEO of Vested Finance, stated that the tariff-driven volatility in the market is likely to continue until the situation stabilises. He suggested that price drops may provide interesting entry opportunities into high-quality global companies at favorable valuations.