Nifty closes below 24,000, Sensex falls 720 points amid crude surge; pharma tariff worries
Mumbai, July 22
Indian equity benchmark indices closed lower on Wednesday as surging crude oil prices and fresh concerns over US tariffs on generic drug imports weighed on investor sentiment.
The BSE Sensex ended the session at 76,749.60, down 720.51 points or 0.93 per cent, while the Nifty 50 closed at 23,996.25, falling 191.45 points or 0.79 per cent.
According to market experts, concerns over rising geopolitical tensions, higher crude oil prices, pressure on the rupee and uncertainty over proposed US tariffs on pharmaceutical exports led to broad-based selling during the session.
Vinod Nair, Head of Research at Geojit Investments Limited, said, "Indian equities ended lower as the ongoing US-Iran standoff and Houthi-led disruptions to key global shipping routes heightened concerns over potential oil supply disruptions, driving crude prices higher and weakening the rupee."
He added that the risk-off sentiment due to renewed concerns over domestic inflation overshadowed better-than-expected business updates and encouraging first-quarter earnings. Rate-sensitive sectors such as realty, banking and consumer durables led the decline, while pharmaceutical stocks came under pressure amid renewed uncertainty over proposed US tariff measures on pharmaceutical exports.
Nair said that despite the cautious market environment, FMCG and auto stocks emerged as relative outperformers, supported by strong quarterly earnings from sector leaders.
Market sentiment was also impacted after US President Donald Trump announced plans to impose tariffs of up to 200 per cent on generic drug imports from 2028.
Under the announcement, generic drugs imported into the US will continue to attract zero per cent tariffs for two years from August 1, 2026, after which the tariff will rise to 100 per cent for one year and 200 per cent thereafter. The announcement put pressure on Indian pharmaceutical stocks during the trading session.
Among the sectoral indices on the NSE, Nifty Auto gained 0.20 per cent and Nifty FMCG rose 0.74 per cent. All other sectoral indices closed in the red. Nifty IT declined 1.56 per cent, Nifty Media lost 2.67 per cent, Nifty Metal fell 0.57 per cent, Nifty Pharma dropped 1.31 per cent, while Nifty PSU Bank declined 1.89 per cent.
At the time of reporting, Brent crude oil prices had surged more than 4 per cent to USD 95.30 per barrel. The Indian rupee was trading at Rs 96.54 per US dollar.
Riyank Arora, Associate Vice President - HNI & Derivatives at Hedged.in, said today's decline was driven by broad-based profit booking and cautious market sentiment. He said the medium-term trend remains constructive as long as key support levels hold, and advised traders to remain selective, avoid aggressive long positions and consider a buy-on-dips approach near strong support zones with strict risk management.
In other Asian markets, Japan's Nikkei 225 index declined 0.10 per cent, Hong Kong's Hang Seng index fell 1.04 per cent, while Singapore's Straits Times gained 1.24 per cent and South Korea's KOSPI advanced 0.73 per cent.
— ANI
Reader Comments
These tariff threats on pharma exports are worrying. Indian pharma companies have worked so hard to build trust in the US market, and now this uncertainty is going to hurt small investors who put their savings in these stocks. The government needs to have a strong diplomatic response.
Crude at $95 is scary for India's import bill. Our economy relies heavily on imported oil, and this surge will put pressure on both the rupee and inflation. RBI might need to step in again. Let's hope the diplomatic channels work to stabilize the situation quickly. 🤞
Respectfully, the market experts quoted in the article are too optimistic. Retail investors like me are sitting on losses. The "buy-on-dips" advice sounds hollow when you see your portfolio bleeding. Let's call this what it is - a correction driven by real economic headwinds, not just profit booking.
Interesting how FMCG and auto are actually holding up despite the sell-off. Maybe domestic consumption stories are still strong? I'm focusing on those sectors for now. Pharma stocks need to be watched closely for the next few months - that tariff timeline (2026 onwards) gives some buffer but de-grading sentiment immediately.
Rs 96.54 per dollar is also a major concern! When rupee weakens, everything becomes expensive - from mobile phones to education loans. The government should focus on boosting exports beyond pharma and IT to reduce our current account deficit. We need a more diversified export basket.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.