Indian equity markets witnessed a sharp decline on Friday as Nifty50 closed at 24,654.70, down 236 points (0.95%), and BSE Sensex fell to 80,426.46, losing 733 points (0.90%). Market analysts cite multiple global and domestic factors driving investor sentiment.

Top Reasons Behind Today’s Market Decline

1. Pharmaceutical Sector Hit by US Tariffs

Shares in the pharmaceutical sector dropped sharply following the US announcement of 100% tariffs on branded and patented drugs. The Nifty Pharma index fell 590 points (2.7%), with top losers including Laurus Labs, Biocon, Zydus Lifesciences, and Natco Pharma, recording declines up to 7%.

2. Global Market Weakness

Asian markets also faced significant pressure. Japan’s Nikkei fell 0.9%, Hong Kong’s Hang Seng dropped 1.4%, and China’s Shanghai Composite declined 0.7%. Global market sentiment has added to selling pressure in India.

3. Foreign Investors Retreat

Foreign Institutional Investors (FIIs) withdrew Rs 4,995.42 crore from Indian equities on Thursday, increasing September’s total outflow to Rs 13,450 crore. In 2025, cumulative FII sell-offs have reached Rs 1,44,085 crore, impacting market liquidity.

4. Weakness in the Indian Rupee

The Indian rupee remains under pressure, trading above its record low of 88.7975 versus the US dollar. Currency volatility, coupled with tariff concerns and H1-B visa changes, has further weighed on the markets. Analysts suggest the rupee could face continued downward movement.

5. Bullion Gains Amid Market Uncertainty

Amid the stock market decline, investors have turned to gold and silver as safe-haven assets. In 2025, gold prices rose over 47%, while silver increased by 58%, reflecting strong domestic demand for bullion.

Market Outlook

Experts expect the markets to remain volatile in the near term due to global economic trends, trade negotiations with the US, and sector-specific developments. Investors are advised to monitor equity, currency, and commodity movements carefully.