The shares of pharma companies surged on April 11 after US President Trump paused his reciprocal tariffs for 90 days, easing concerns over a possible US recession, and helped by the anticipation that the pharma sector is unlikely to bear the brunt of major tariff levies.
The rise in the stock prices pushed Nifty Pharma index up over 2 percent to close at 20,461.90.
Laurus Labs shares were the top gainer on the index, rising over 7 percent to close at Rs 606.10 apiece.
Granules and Cipla shares were meanwhile up over 4 percent and 3 percent higher respectively. Notably, Cipla on April 11 announced that it has received final approval from US FDA for its generic cancer drug Paclitaxel. Granules announced the completion of its acquisition of Senn Chemicals. Sun Pharma, Aurobindo Pharma, Zydus Lifescience and Biocon jumped 2-3 percent each. Biocon also announced that it has received US FDA’s approval for its cancer drug Jobevne.
Lupin and Zydus Life shares gained nearly 3 percent each, while Dr Reddy’s Labs, Gland Pharma, Abbott India and Torrent Pharma were up nearly 1 percent each. Mankind Pharma and others were also trading in the green.
Trump had on April 2 unveiled a slew of reciprocal tariffs on trading partners, triggering a global markets selloff, however, he chose to keep pharma sector out of the purview, but later hinted at including the drugmakers too in the ambit.
N Jayakumar, the MD of Prime Securities told CNBC Awaaz that the pharma sector is an opportunity to buy, and Trump's threat of tariff on drug makers is more aimed at the Big Pharma based out of Europe, and the dumping into US by China. Prashant Khemka, founder and MD of WhiteOak Capital said the tariff turmoil has meant that volatility is now a part and parcel of the game. He too concurred that the tariff threat on Pharma is only a negotiation ploy, and Indian companies would be relatively better off.
Also Read: 3 reasons why Trump announced 90-day pause on tariffs
On April 9, Trump had paused his reciprocal tariffs for 90 days, stating that several nations are trying to negotiate a deal with US. Moneycontrol reported on April 10 that India is in talks with the US for a bilateral trade agreement (BTA), and a partial deal may be sealed soon. While no specifics have been given for pharma stocks, the tariff pause and the India-US trade talks are being seen as a positive trigger for the sector.
Rahul Singh, CIO - Equities at Tata Asset Management said, "The recent global tariff changes have added uncertainty to markets, but India is better positioned than before. With lower exposure to US trade and strong domestic demand, the direct impact remains manageable. In fact, falling global prices of crude and metals may support Indian companies by reducing input costs. Sectors like banking, pharma, and energy now offer attractive value with solid balance sheets."
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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