Why Market Is Down Today: Top 5 Factors Every Investor Should Know

The Indian stock market has seen a sharp pullback as investors shifted focus from the much-anticipated GST 2.0 boost to the impact of new U.S. tariffs under the Trump administration, affecting sectors like IT and pharmaceuticals.

On Friday, September 26, the Sensex dropped over 660 points, while the Nifty slipped below 24,750. Major laggards included M&M, Eternal, Sun Pharma, Tata Steel, HCL Tech, Tech Mahindra, and TCS, while Reliance, Maruti, L&T, and Tata Motors were among the gainers. Nifty Pharma led sectoral declines, down more than 2%, followed by IT, PSU banks, autos, and metals.

Trump Tariffs Weigh on Markets

The fall comes amid growing concerns over US tariffs on Indian exports. The 50% tariffs announced by President Donald Trump include 25% reciprocal tariffs and a 25% penalty on imports of Russian crude oil. Export-oriented sectors such as textiles, gems, jewellery, and shrimp have already felt the impact.

The scope of tariffs has now extended to services. The recent H-1B visa fee hike to $1 lakh has added pressure on IT stocks, which hold significant weight in the index.

In addition, the US has imposed a 100% tariff on branded and patented pharmaceutical products, further pressuring the pharma sector.

Expert Insights: Factors Behind the Fall

Sugandha Sachdeva, Founder of SS WealthStreet, said: "Benchmark indices have witnessed a straight six-session decline, snapping a three-week winning run and down around 2.3% for the week. Most sectoral indices are trading lower with big cuts in pharma and IT stocks." She highlighted multiple factors contributing to the decline:

Persistent FII outflows, with foreign investors selling around ₹24,000 crore of Indian stocks this month.

Sachdeva added, "We see a near-term support zone for the benchmark indices around 24,700–24,720. If breached, levels of around 24,400 may be tested. All eyes are now on the US PCE price index data, which will provide further cues on the Fed’s monetary policy."

She also added, “Markets would also look forward to the RBI policy meeting lined up next week where there are expectations for another 25bps rate cut, which should mark the end of this easing cycle. We expect renewed inflows in Indian markets after a one-year hiatus, when valuations in the Indian markets had stretched and foreign investors moved to Chinese markets last year around the same time when China announced big stimulus packages to revive its economy.”

Also Read: Why Are Markets Falling? Sensex Down 640 Points, Nifty Below 24,800 as US Tariff Deadline Weighs on Investors | Republic World

Sectoral Impact

IT & Pharma: Sharpest declines, driven by US tariffs and visa fee hike.

Exports: Sectors like textiles, gems, jewellery, and shrimp remain vulnerable.

Auto & Metals: Also affected due to global economic uncertainty and commodity price fluctuations.

Looking Ahead

The markets remain volatile as investors digest the implications of US tariffs, geopolitical tensions, and domestic macroeconomic cues. While support levels provide potential relief, the near-term outlook is cautious. Traders and investors are closely monitoring the US PCE inflation data, which could shape the Fed’s next moves and influence Indian market sentiment.