Nifty Pharma Records Steepest Fall Since 2020 – Here’s Why

On Friday, April 4, 2025, Indian equity benchmarks were seen trading in the red, with broader market sentiment turning negative. Among the hardest-hit sectors was Nifty Pharma, which saw a sharp decline of over 4% by 11:15 AM. The index dropped 4.34%, registering its steepest single-day fall since September 2020.

Broad-Based Sell-Off in Nifty Pharma Constituents

All ten constituents of the Nifty Pharma index were trading in negative territory during the session. Leading the decline were:

• Gland Pharma, Ajanta Pharma, and Biocon, each down over 5%
• Zydus Lifesciences, JB Chemicals & Pharmaceuticals, Natco Pharma, Divi’s Laboratories, Dr Reddy’s Laboratories, and Sun Pharmaceutical Industries, all down by over 4%

This broad-based sell-off reflects market participants’ apprehensions regarding external headwinds for the pharmaceutical industry.

US Tariff Fears Rattle Pharma Stocks

The sudden reversal in sentiment was largely driven by news reports suggesting that US President Donald Trump is considering imposing tariffs on pharmaceuticals. Speaking aboard Air Force One, Trump said his administration was evaluating trade measures targeting the sector. “Pharma is going to start coming in at, I think, a level that you haven’t seen before,” Trump remarked, hinting at an aggressive tariff stance.

He added that pharma would be treated as a separate category, with a formal announcement expected soon. This development has unnerved investors, especially given the significant exposure many Indian pharmaceutical companies have to the US market.

A Turnaround from the Previous Day’s Optimism

The timing of the statement has amplified market reactions, as it came just a day after pharma stocks had rallied on hopes that the sector would avoid new trade restrictions. This unexpected pivot has led to a swift reassessment of risk, prompting a sharp sell-off across the board.

Conclusion

While the tariff announcement is yet to be formalised, the prospect of heightened trade barriers has clearly unsettled investors in the pharmaceutical space. Going forward, market participants are likely to remain watchful of any official statements from the US administration regarding these proposed measures.

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