D-Street stumbles as fresh tariff fear feeds into slowdown woes

Subscribe to enjoy similar stories. Mumbai: A spell of weakness in Asian markets spilled into Indian equities on Friday, sparking a sell-off that swept across sectors. Indian markets that averted a steep fall a day earlier plunged 1.5%, as fears of a US recession and its consequences grew.

A key victim was the pharmaceutical sector, which US president Donald Trump has promised to target next. The Nifty 50 fell 1.5% to close at 22,904.45 while the Sensex dropped 1.2%, ending at 75,364.69. The smaller shares took a bigger hit, with Nifty Midcap 100 tumbling 2.9% and Nifty Smallcap 250 plunging 3.3%.

Elsewhere, Hong Kong's Hang Seng, China's Shanghai Composite, Japan's Nikkei and South Korea's Kospi fell 1.5%, 0.2%, 2.8% and 0.9% respectively. Nifty Pharma that gained a day earlier plunged 4%, becoming the second worst performer among NSE sectors, just behind Nifty Metal which dropped 6.6%. All sectoral indices ended the day in the red, barring Nifty FMCG which closed flat.

Overnight, Trump had stated that he plans to impose pharma tariffs at "a level that you haven’t really seen before". Also read | Stock market pain begins. ‘This is how you sabotage the world’s economic engine’ The previous day, market reaction was "surprisingly better than expectations", said Gaurav Dua, senior vice-president and head of capital market strategy at Mirae Asset Sharekhan, as investors drew hope from India's relatively lower reciprocal tariffs rates.

Moreover, he believes Thursday's weekly expiry also could have played its role in limiting the damage. “Continued weak global cues and possibility of negative growth in the global economy seem to have led to sell off today," Dua added. The tariff shock will likely reflect in US inflation and