Sensex, Nifty hit 3-week low as Trump visa fee, drug tariff jolt IT-pharma stocks

Indian equity benchmarks slumped to a three-week low on Friday, registering their steepest weekly decline in nearly seven months. The sell-off was primarily driven by investor concerns over new policies from US President Donald Trump that negatively impact key Indian export sectors.

The S&P BSE Sensex dropped 0.9% to close at 80,426.46, while the Nifty 50 fell 0.95% to settle at 24,654.7. Over the week, both indices witnessed a significant decline of 2.7%.

Here are the key factors behind today’s market performance:

1. Broad-Based Decline: The selling pressure was widespread, with all 16 major sectoral indices ending the trading session in negative territory.
   
2. IT Sector Worst Hit: The Nifty IT index was the biggest weekly loser, plunging nearly 8%. This downturn was triggered by President Trump’s announcement of a $100,000 fee on new H-1B visas, which is expected to significantly increase operational costs for Indian IT firms that derive substantial revenue from the US market.
   
3. Global Tech Concerns: The negative sentiment was amplified after global IT services firm Accenture projected a weaker full-year outlook, pointing to sluggish demand in the technology services industry.
   
4. Pharma Stocks Under Pressure: The Nifty Pharma index also faced heavy selling, falling 2.1% for the day and 5.2% for the week. This was a reaction to Trump’s imposition of 100% tariffs on branded and patented drugs, effective October 1st.
   
5. Export Sector Jitters: While India’s direct exposure to patented drug exports is limited, analysts noted that the announcement has created an atmosphere of uncertainty for all export-oriented industries.
   
6. Foreign Investor Sell-Off: After two weeks of buying, Foreign Portfolio Investors (FPIs) turned net sellers this week, offloading approximately $1.4 billion in Indian equities due to worries over the new US policies.
   
7. Broader Market Suffers: The downturn was not limited to large-cap stocks. Mid-cap and small-cap indices saw even steeper declines, falling 4.6% and 5.1% respectively over the week.
   
8. L&T a Rare Bright Spot: In an otherwise negative session, shares of Larsen & Toubro (L&T) gained 2.3% after the company announced its exit from the loss-making Hyderabad Metro rail project.

The market downturn reflects growing anxieties about the impact of US protectionist policies on India’s key corporate sectors.