Today's stock market: PSU banks lead the collapse as the Sensex drops 155 points and the Nifty 50 falls below 24,400 due to a widespread sell-off.

Following the signing of an order by U.S. President Donald Trump to increase domestic medication manufacture, the Indian stock market closed Tuesday's trading session, May 6, in the red as broader losses led by pharmaceutical sectors pulled indices down.

The market received some support from auto companies, with Mahindra & Mahindra leading the way, but not enough to stop a fall, breaking the Nifty 50 and Sensex's two-day winning streak.

As traders assessed global trade developments and anticipated the U.S. Federal Reserve's policy decision later this week, sentiment was also affected by Wall Street's lackluster handover, which put an end to its nine-day gain streak. Since India is set to hold simulated civil defense exercises on Wednesday, the market is also concerned that tensions between India and Pakistan may worsen. The Sensex fell 0.19%, or 155 points, to 80,641, while the Nifty 50 fell 0.33% to 24,379 as well. The Nifty Midcap 100 index fell 2.27% to 53,435 while the Nifty Smallcap 100 index ended 394 points, or 2.50%, lower at 16,195, indicating an even more severe loss in the wider markets.

All sectors closed lower, with the exception of Nifty Auto, which saw minimal movement. PSU banking stocks led the decline, with the Nifty PSU Bank index falling 4.84%.

Regarding individual stocks, CCL Products announced its highest-ever quarterly net profit and revenue in Q4FY25, above analysts' projections and driving the stock up 16%, making it the top gainer among Nifty 500 firms. According to persons familiar with the situation who spoke to Bloomberg, India has suggested zero tariffs on steel, auto parts, and pharmaceuticals on a reciprocal basis—up to a specific number of imports—in its trade talks with the United States.

According to Treasury Secretary Scott Beseent, the Trump administration is "very close to some deals," as reported by CNBC on Monday. According to the source, Trump stated on Sunday that tariff agreements with some nations might be reached as early as this week.

Expectations that India would be one of the first countries to sign a trade agreement with the United States have boosted investor optimism in recent sessions, which has helped to sustain the robust rebound in Indian equity markets. Moody's Ratings lowered India's GDP growth forecast for 2025 from 6.5% to 6.3%, citing a global slowdown brought on by increased trade restrictions and U.S. policy uncertainty.

Moody's also pointed out in its Global Macro Outlook 2025–26 (May update) that geopolitical tensions, such those between India and Pakistan, could be detrimental to its baseline growth projections.