Pharma tariffs, RIL shares: Key reasons why Sensex, Nifty are down today

Why market is falling today: The BSE Sensex index plunged 1,055 points in the intraday trade to hit a low of 75,240.5 during the day. The NSE Nifty50, meanwhile, breached below the 23,000-mark

Why market is down today: India stock markets took a beating on Friday, April 4, 2025, as investors, globally, fretted over US President Donald Trump's tariff impact on global trade and a possible trade war.

 

The BSE Sensex index plunged 1,055 points in the intraday trade to hit a low of 75,240.5 during the day. The NSE Nifty50, meanwhile, breached below the 23,000-mark to hit a low of 22,857.45. The index dropped 392.6 points intraday.  As of 3:30 PM, the Sensex was 1.22 per cent or 930.67 points down at 75,364.6 while the Nifty was lower by 1.49 per cent or 345.65 points at 22,904.45. 

 

 

In the broader market, the Nifty MidCap index and the Nifty SmallCap index declined in the range of 2.9 per cent to 3.3 per cent.

 

According to analysts at Kotak Institutional Equities, the imposition of a uniform 26 per cent reciprocal tariff on India’s exports to the US will likely have a large negative impact on the profitability and possibly volumes of sectors and companies with a meaningful portion of their revenues from the US market.

 

“We doubt companies will be able to change and/or reroute exports meaningfully, leading to companies likely having to absorb a decent portion of the higher tariffs. We see second-order price competition among exporters to the US and other countries as global trading patterns adjust to high tariffs in the US,” they said in a report.

 

Meanwhile, the sudden fall in the stock markets today came after reports said Donald Trump could impose tariffs on the pharmaceutical sector, which is one of the biggest exports-oriented sectors for India.

 

Why markets are falling today? Key reasons behind the fall in Nifty, Sensex today:

 

Trump mulls tariffs on pharma sector:

According to reports, US President Donald Trump is considering imposing tariffs on the pharmaceutical sector. Pharma tariffs, he said, will come at levels no one has “really seen before”.

 

“We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near future, and not too distant future. It's under review right now," Trump was quoted as saying.

 

Consequently, the Nifty Pharma index crashed 6 per cent intraday with individual pharma stocks falling up to 6.25 per cent.

 

At the end of financial year 2023-24 (FY24), the pharmaceuticals sector was the third biggest export-oriented sector in India towards the US. Of the total India exports to the US, worth $78 billion, the pharma sector accounted for 10.3 per cent.

 

Meanwhile, Trump’s tariff stance on the pharma sector is in contradiction to the reciprocal tariffs announced on April 2, 2025, where he had exempted the sector from any levy and/or charges.

 

Analysts, back home, had cheered the move as it limited the impact of the reciprocal tariffs on India. Now, with Trump considering a fresh wave of tariffs on the pharma sector, the impact on India’s exports and gross domestic product (GDP) growth hangs in balance.

 

Selling in RIL shares:

Shares of index heavyweight Reliance Industries tumbled over 4 per cent on the BSE today, hitting an intraday low of ₹1,192.85 per share, exerting significant pressure on the index.

 

Reliance Industries shares hold a weight of 11.25 per cent in the Sensex index, and accounted for roughly 50 per cent of today’s fall in the benchmark index.

 

The fall in RIL shares came after oil futures for Brent crude and WTI crude declined nearly 7 per cent in the overnight trade on Thursday amid global demand concerns.  

 

While WTI crude oil futures touched the $66 per barrel-mark, Brent crude oil futures fell to $70 per barrel.

 

Rising concerns of a recession in the US, along with trade war concerns, put pressure on oil prices. Add to it, the Organisation of Petroleum Exporting Countries (Opec+) has decided to increase the output by 4.11 million barrels a day in May, against the previous forecast of 1.38 million barrels a day.

 

Reliance Industries, which is among the top oil upstreaming companies in India, faces downside earnings pressure from falling crude oil prices as oil and petchem business accounts for roughly 60 per cent of the company’s revenues.

 

Profit booking in largecaps:

Apart from RIL, many other large-cap stocks were in the midst of a sell-off with Tata Steel, Tata Motors, L&T, IndusInd Bank, Sun Pharmaceuticals, Tech M, Adani Ports, HCL Tech, Infosys, TCS, Maruti Suzuki, NTPC, Asian Paints, and Titan falling in the range of 1 per cent to 6 per cent.

 

Among these, Tata Steel, Tata Motors, and IT stocks were witnessing a sell-off due to their dependence on exports to global markets, especially the US, the UK, and Eurozone.

 

Global markets tumble:

Asian market investors were looking for cover as key benchmark indices in the region plummeted for a second straight day, fearing a global trade war in the aftermath of Trump’s tariffs, and a recession in the US due to higher inflation and slower growth.

 

Japan stocks were the worst hit with the Nikkei index down 3 per cent. Australia’s S&P/ASX 200 fell 2.44 per cent, and South Korea’s Kospi slipped 1.78 per cent. China and Hong Kong markets were shut for a holiday today.

 

Overnight in the US, the S&P 500 slid back into correction territory, dropping 4.84 per cent, the Dow Jones Industrial Average tumbled 3.98 per cent, and the Nasdaq Composite fell 5.97 per cent.

 

US market futures were down on Friday as well, suggesting more pain for Wall Street when it opens for trade later today.

 

Futures tied to Dow Jones lost 348 points or 0.86 per cent, the S&P 500 futures declined 0.69 per cent, and Nasdaq 100 futures slipped 0.47 per cent.

Technical levels to watch:

According to Shrikant Chouhan, head of equity research at Kotak Securities, 23,350 on the Nifty and 77,000 on the Sensex are the key level to watch. 

If the indices move above these levels, the bounce could continue towards 23,500-23,600/77,500-77,800.

 

“Conversely, if they drop below 23,150/75,800, the selling pressure could increase, potentially leading the market to retest levels around 23,000-22,950/75,500-75,300,” he said.