Nifty Pharma Drops 2%; Sensex, Nifty Open Weak Amid Rising Crude Prices

Indian benchmark indices opened marginally lower on Wednesday as losses in pharmaceutical stocks offset positive global cues, while elevated crude oil prices and geopolitical tensions in the Middle East kept investor sentiment cautious.

At around 9:15 a.m., the Sensex was down 361.08 points, or 0.47%, at 77,109.03, while the Nifty 50 declined 102.60 points, or 0.42%, to 24,085.10.

Market breadth was mixed, with 1,069 stocks advancing, 1,187 declining and 167 remaining unchanged.

Among the top losers on the Nifty were InterGlobe Aviation, Cipla, Max Healthcare, Sun Pharma and Dr Reddy's Laboratories, while Bajaj Auto, ONGC, Maruti Suzuki, Hindalco and Nestlé India were among the leading gainers.

Pharma Stocks Under Pressure

The Nifty Pharma index declined nearly 2%, making it the worst-performing sector in early trade, after US President Donald Trump announced a phased tariff regime on imported generic medicines.

Under the proposal, generic medicines imported into the US will continue to attract zero tariffs for two years from August 1, 2026. Import duties will then increase to 100% from August 1, 2028, before rising further to 200% a year later.

The announcement weighed on Indian pharmaceutical companies, many of which generate a significant portion of their revenue from the US market, raising concerns over their long-term earnings outlook.

Crude Oil Remains Elevated

Investor sentiment also remained cautious as Brent crude traded above $92 a barrel, extending gains amid escalating tensions in the Middle East.

In early morning trade, Brent crude rose 1.53% to $92.40 per barrel, while WTI crude gained 1.38% to $85.50. Both benchmarks had ended Tuesday at their highest closing levels in around five weeks after renewed geopolitical risks heightened concerns over global oil supplies.

Asian Markets Advance

Despite higher oil prices, Asian markets traded higher, tracking overnight gains on Wall Street led by technology and semiconductor stocks.

MSCI's Asia-Pacific index excluding Japan advanced 1.2%, South Korea's Kospi surged more than 6%, while Japan's Nikkei 225 gained 1.9%. Investors remained optimistic following a rebound in US AI-related stocks, although concerns over energy prices and geopolitical risks persisted.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the ongoing US-Iran conflict and rising Brent crude prices are likely to remain the biggest near-term headwinds for the market despite encouraging developments elsewhere.

He said early June-quarter earnings from automobile companies have been strong, with management commentary pointing to healthy demand and robust export performance. Vijayakumar also noted that the recent correction in leading banking stocks appears to have run its course, making the sector attractive from a valuation perspective.

He added that the rupee is expected to remain stable, supported by FCNR deposit inflows, which have now crossed $20 billion, with further inflows likely in the coming months. According to Vijayakumar, the correction in semiconductor stocks and weakness in markets such as South Korea have improved India's relative valuation appeal. He also said foreign portfolio investors have reduced selling and have turned buyers on several occasions, adding that market declines could provide buying opportunities in fundamentally strong companies, while the broader market may continue to outperform in the near term.