Nifty Pharma jumps over 2%: Analysts decode the drivers behind the rally

Nifty Pharma index: Nifty Pharma index, which tracks the performance of the top pharmaceutical companies listed on National Stock Exchange (NSE), surged up to 2.41 per cent to hit an intraday high of 22,253.75 levels. Notably, Nifty Pharma is the top sectoral gainer.

 

Individually, Cipla soared up to 3.68 per cent to hit an intraday high of Rs 1,547.70 per share, while Sun Pharma soared up to 3.30 per cent to hit an intraday high of Rs 1,791.60 per share. 

 

Among others, Torrent Pharma was up 3.60 per cent, Laurus Labs (2.95 per cent), Divis Labs (2.64 per cent), Lupin (2.56 per cent), Alkem Labs (2.54 per cent), Zydus Life (2.15 per cent), Aurobindo Pharma (1.99 per cent), Abbott India (1.76 per cent), Ipca Labs (1.63 per cent), Ajanta Pharma (1.44 per cent), Glenmark Pharma (1.32 per cent), Natco Pharma (1.31 per cent), Dr Reddy’s (1.15 per cent), Gland Pharma (0.77 per cent), JB Chemicals and Pharma (0.37 per cent), Biocon (0.25 per cent), Granules (0.24 per cent). On the flipside, Mankind Pharma was the only loser, down 0.09 per cent.  

  Also Read: Lupin shares gain 3% after USFDA approves type-2 diabetes drug; details   The rise in the Nifty Pharma index came on the back of a combination of factors, including the depreciation of the Rupee, Trump's tariffs on China, and technical market dynamics.

 

G Chokalingam, founder and head of research at Equinomics Research said, “The continuous depreciation of the rupee is one positive development for the Indian pharmaceutical sector. Secondly so far President-elect Donald Trump has spared India in his protectionism measures. This has given hope that under his regime the Indian pharma sector may not face any direct or indirect pressures. Therefore, we believe that this sector’s stocks are positively reacting.” 

 

On the other hand, Gaurang Shah, senior vice-president at Geojit Financial Services, stated that Contract Development and Manufacturing Organisation (CDMO) companies are set to be major growth drivers for the pharma index, as they are likely to benefit greatly under the Trump administration once the Biosecure Act is enacted following Donald Trump’s inauguration. Additionally, he highlighted that India’s advancing Research and Development (R&D) capabilities could boost demand for its pharmaceutical services from Western nations.

 

What do technical charts suggest?

 

According to Jigar S Patel, senior manager of equity research at Anand Rathi, the Nifty Pharma index surged by over 2 per cent intraday, driven by two notable technical factors. 

 

“Firstly, on the daily chart, a Bullish ABC pattern was identified, which is a harmonic chart pattern signalling potential trend reversals. This pattern suggests that the index completed a corrective phase and was poised for an upward rally, confirming bullish momentum. Secondly, on the intraday scale, Nifty Pharma exhibited strong price action by breaking out above the R4 Camarilla pivot level, a significant resistance point used in intraday trading to identify potential breakout zones. A move above R4 typically signals heightened bullish sentiment and the potential for further upward movement. Together, these technical factors aligned to fuel robust buying interest, driving the sharp intraday rally,” Jigar S Patel said.

 

Last checked, Nifty Pharma index was trading 2.38 per cent higher at 22,246.65 levels. In comparison, the Nifty50 index was trading 0.86 per cent higher at 24,120.45 levels.