Why stock market fell today: Sensex tumbles 733 pts, Nifty below 24,700; 5 key factors behind the bloodbath

Indian benchmark indices slumped on Friday after U.S. President Donald Trump announced steep tariffs of up to 100% on imports of 'branded and patented' drugs effective October 1, 2025.

Sensex tumbled over 800 pts intraday to trade below the 80,400 level; meanwhile, the Nifty50 fell over 250 pts to slip below the 24,650 level. The 30-stock index however ended at 80,426.46, down 733.22 or 0.90% while the broader Nifty settled at 24,654.70, falling 236.15 points or 0.95%.

Why stock market fell today? Check top factors

1) Pharma sector bleeds on tariff woes

Indian pharma stocks declined on Friday after investors reacted to U.S. President Donald Trump’s move to impose a 100% tariff on 'branded and patented' drugs.

Sector gauge Nifty Pharma tanked 570 points or 2.14% to close at 21,507.20 after hitting the day's low of 21,390.25. In the 20-stock index, 17 were losers while just three managed to trade in the green. Laurus Labs, Biocon, Zydus Lifesciences, and Natco Pharma were among the major losers, falling up to 7%.

2) Asian markets in red

Asian markets traded deep in the red on Friday, with broad-based selling across major indices. Japan’s Nikkei slipped 0.9%, Hong Kong’s Hang Seng dropped 1.4%, and China’s Shanghai Composite was down 0.7% around 2:12 pm IST.

3) FII sell-off

Markets have been hit by a major sell-off trend by Foreign Institutional Investors (FIIs). On Thursday, they sold domestic equities worth Rs 4,995.42 crore, taking the September outflows to Rs 13,450 crore. In 2025, so far, they have shed domestic shares worth Rs 1,44,085 crore.

4) Weakness in rupee

While the rupee managed to stay above the all-time low of 88.7975 against the US dollar. The INR ended little changed versus the U.S. dollar at 88.665, with likely central bank intervention offsetting pressure from weak equities and foreign outflows.

The latest pharma sector tariff and the H1-B visa decision have come as a double blow for the Indian markets.

"It is still unclear how branded or patented pharmaceutical products will be defined, but our working assumption is that this will not incorporate generic drugs and pharmaceutical shipped by the likes of India to the U.S.," Reuters reported, quoting Michael Wan, senior currency analyst at MUFG said in a note.

The U.S. accounts for slightly more than a third of India's pharmaceutical exports, primarily consisting of cheaper generic versions of popular drugs. India's U.S. sales rose 20% year-on-year to approximately $10.5 billion in fiscal 2025.

5) Bullion's rising appeal

The loss in Indian equity markets has been a boon for the domestic bullion markets as investors are thronging for gold and silver's safe haven appeal. The domestic prices of gold and silver have appreciated by over 47% and 58%, respectively, in 2025, so far.

Expert take

Commenting on the day's action, Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities said that exactly one year ago, Nifty had closed at an all-time high. Since then, the benchmark has slipped just about 5.5%, giving an impression of relative stability, Sheth said.

A deeper look across the broader market reveals a far more painful reality for investors, he informed.

"Out of the top 750 listed stocks, only 245 have delivered positive returns, while a striking 485 stocks are in the red (20 stocks were listed after 26 Sep 2024). The median return is -11.56%, and the average return is -6.25%, highlighting that losses are more widespread than the index alone suggests. The pain is more severe in the broader universe with 254 stocks losing over 20% of their value, while only 103 have managed to gain more than 20%. Midcap, smallcap, and microcap indices have all underperformed the Nifty, with declines in the range of -8% to -9% over the past year," the Samco analyst said.