Extending rally for the second consecutive session, pharma stocks ended higher on Wednesday, in an otherwise volatile market. The sector is tracking gains from the overseas trend, amid the virus scare that has infected over 94,240 people globally and caused 3,220 fatalities worldwide.
Sun Pharma closed 3% higher, while other healthcare stocks such as J.B. Chemicals, Ajanta Pharma, Dr. Lal PathLabs, Novartis Industries, Torrent Pharma, Lupin, Aurobindo Pharma, Caplin Point and Albert David gained in the range of 2-2.5%. Overall, 20 out of 30 stocks closed in the green on S&P BSE Healthcare.
On both the bourses, BSE and NSE, the pharma sector outperformed the broader market, which fell amid rising uncertainty among investors. In the month of March, the healthcare sector on BSE has overall gained 473 points or 3.5%.
On BSE, Healthcare index gained 1.13% on back of gains in Indoco Remedies, Cipla, Sun Pharma Advanced Research and Company, IOL Chemicals and Shilpa Medicare that rose over 5% each.
On a similar note, 6 out of 10 stocks ended in the green on Nifty Pharma. Where Cipla, Dr. Reddy labs closed 4% higher each, Sun Pharma, Glenmark, Lupin and Aurobindo Pharma gained 2% by Wednesday's closing bell on the NSE.
On Tuesday, Nifty Pharma index was the sole gainer among the sectoral indices and closed 1.98% higher in a heavy selloff market.
The rise in the share price of pharmaceutical companies is due to rise in demand for generics and branded generics. Further government declaring a ban on active pharmaceutical ingredients (API) also alarmed investors over the impact of coronavirus in the country. India has also put paracetamol, antibiotics, vitamins on export ban list to fight the virus outbreak. As of now, 28 people in India, including 16 foreigners have been infected by the COVID-19 virus in India.
The World Health Organization (WHO) also warned countries of a global shortage and price gouging for protective equipment to fight the fast-spreading coronavirus. The specialised agency of the United Nations has asked companies and governments to increase production by 40% as the death toll from the virus has been on a continuous rise.