Indian pharma and IT stocks tumbled on March 4, 2025, as US President Donald Trump's new tariffs on Canada and Mexico took effect, sparking concerns over global trade. Investors moved away from export-sensitive stocks, leading to a sharp decline in Nifty IT and Nifty Pharma indices, even as broader markets traded in a stable range.

IT Stocks Witness Sharp Sell-off

The Nifty IT index was deep in the red, with major IT companies experiencing losses:

• LTI Mindtree was the worst performer, dropping nearly 4% to ₹4,647 per share. The stock has lost 21% in the past month.
• Coforge, Persistent Systems, and HCL Tech fell around 2% each, extending their recent downtrend.
• Mphasis shares declined 1%, trading at ₹2,237 apiece.
• Infosys, Wipro, L&T Technology Services, and Tech Mahindra also traded in the red, though with marginal losses.
• TCS bucked the trend, managing to stay in the green with minor gains.

Pharma Stocks Under Pressure

The Nifty Pharma index also saw losses, led by major stocks:

• Sun Pharma was the top loser, falling 2% to ₹1,560 per share. Over the past month, it has declined 12%.
• Gland Pharma and Mankind Pharma both dropped over 1%.
• Torrent Pharma, Cipla, Lupin, Aurobindo Pharma, and Dr Reddy's Laboratories recorded marginal losses.

Despite the downturn, some pharma stocks managed to gain:

• Biocon surged 3%, while Laurus Labs, Abbott India, J B Chemicals, and Natco Pharma each gained over 1%.
• Ajanta Pharma, Glenmark, Alkem Labs, and Zydus Life traded with minor gains.

Trump’s Tariffs Spark Global Trade Concerns

The stock market reaction comes as Donald Trump's tariffs on Canada, China, and Mexico take effect, raising concerns about potential US trade measures against India.

• Canada retaliated with a counter-tariff package targeting US-made products. Canadian Prime Minister Justin Trudeau stated, "Canada will not let this unjustified decision go unanswered."
• China’s Commerce Ministry condemned the move, calling it an attempt to "shift the blame" and "bully Beijing." The US has accused China of supplying chemicals used in fentanyl production, which China denies.
• Mexico’s President Claudia Sheinbaum responded by saying, "We have a plan B, C, D," signaling alternative economic measures.

India Braces for Possible Tariff Action

Investors fear that India could be next on the US tariff list, as Trump has repeatedly warned of imposing reciprocal duties on Indian exports.

With IT and pharma being India’s top export-driven sectors, any potential tariff action from the US could further impact Indian stocks, leading to heightened market volatility in the coming months.

Market Outlook: What Lies Ahead?

• Export-heavy companies are likely to remain under pressure as investors factor in the impact of global trade policies.
• Large-cap pharma stocks like Sun Pharma and Dr Reddy’s may see short-term volatility, despite long-term growth prospects.
• IT firms with heavy US exposure, such as Infosys and Wipro, could face continued selling pressure unless trade tensions ease.
• Investors are closely monitoring US policy announcements for further clarity on the extent of Trump's reciprocal tariff plans for India.

As the situation unfolds, market participants are advised to stay cautious and diversify portfolios, keeping an eye on emerging geopolitical risks and trade policies.

The Current active IPO are NAPS Global, Balaji Phosphates.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.

Join our Finance Saathi Telegram Channel for Regular Share Market, News & IPO Update.