On September 26, 2025, the Indian stock market experienced a decline, with the Sensex and Nifty indices both trading lower. Several factors contributed to this downturn, including global cues, US trade policies and sector-specific concerns.

Global Market Cues and Trade Tensions

Weak cues from global markets played a significant role in the negative opening for the Indian benchmark indices. US President Donald Trump's announcement of fresh tariffs on pharmaceutical products, heavy trucks, and kitchen cabinets rattled global sentiment. Specifically, Trump announced a 100% tariff on branded drugs, a 25% tariff on heavy-duty trucks, a 50% tariff on kitchen cabinets and bathroom vanities, and a 30% tariff on upholstered furniture. These measures sparked fears of a renewed global trade war, dampening investor risk appetite and putting pressure on Asian equities.

Asian markets, in general, slipped into the red. South Korea's Kospi, Japan's Nikkei 225, and Australia's ASX 200 all experienced declines. US stocks also fell for the third straight session as strong economic data tempered hopes for further Federal Reserve rate cuts.

Impact of US Economic Data

US economic data further complicated the outlook for rate cuts. A sharp upward revision in GDP growth alongside an unexpected dip in jobless claims heightened uncertainty around the Federal Reserve's policy stance. This led to a decline in US equities, with the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average all slipping. The robust US economic indicators also strengthened the dollar, adding to the negative sentiment in global markets.

Sector-Specific Concerns

Pharmaceutical stocks were particularly hard hit following the announcement of tariffs on branded drugs. Major pharma companies like Sun Pharma, Biocon, and Zydus Lifesciences experienced significant declines. IT stocks also faced pressure after Accenture issued cautious guidance for fiscal year 2026 and announced a cost restructuring plan.

Technical Analysis and Market Sentiment

Technical analysis of the Nifty 50 index revealed a bearish candle formation, indicating a continuation of the decline. The index slipped below the crucial 25,000 mark, raising concerns about further weakness. The derivatives landscape reflected caution, with aggressive call writers overshadowing put writers. The Put-Call Ratio (PCR) also slipped, signaling a bearish bias.

Analysts suggested that the underlying trend of Nifty 50 continued to be weak, and a sharp move below 24,900 could open further weakness down to 24,700 - 24,600 levels in the near term.

Other Influencing Factors

Several other factors also contributed to the stock market decline:

• Foreign Capital Outflow: Persistent selling by Foreign Institutional Investors (FIIs) weighed on Indian equities.
• Rupee Weakness: A weakening rupee against the dollar added to the concerns.
• Bullion's Rising Appeal: Rising appeal of bullion as a safe-haven asset also influenced market sentiment.
• Lack of Fresh Triggers: Indian markets struggled to find fresh positive catalysts.
• Concerns over Stretched Valuation: Concerns persisted regarding overstretched valuations in the Indian stock market.

Overall, the stock market decline on September 26, 2025, was a result of a combination of global factors, trade tensions, sector-specific concerns, and technical indicators, leading to a cautious sentiment among investors.