Pharma stocks sink amid Sensex, Nifty rally in early deals; here's why 

Pharma stocks fell despite a strong rally in Sensex and Nifty on Monday after US President Donald Trump  said he would sign an executive order to cut prescription prices to the level paid by other high-income countries, an amount he put at 30% to 80% less. This would likely lead to a cut in prices of medicines for the American people.

The US President also said that he would be instituting a most favoured nations policy, “whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World.” Healthcare costs in the US “will be reduced by numbers never even thought of before,” he said. 

Moreover, clarity on tariffs on imports of drugs into the US is still waited, which has capped gains in the pharma sector stocks. 

Earlier, Trump had said that pharma tariffs will be at "never seen before levels."

Meanwhile, the BSE pharma index slipped 333 points in early deals to 40,889 against the previous close of Rs 41,222. 

On similar lines, the Nifty pharma index crashed 495 points in early deals to 20,576. Pharma major Sun Pharma saw its shares falling 7% to Rs 1623 against the previous close of Rs 1744.85 on BSE. Market cap of the company fell to Rs 4.04 lakh crore. 

Other pharma stocks such as Biocon, Suven Pharma, Aurobindo, Lupin, Divis and Glenmark fell between 1% and 4% on Monday and were among the top losers on the Nifty 500 index.

In late morning deals, the BSE healthcare index saw a recovery, rising 328 pts to 41,550 and Nifty pharma index was down just 16 points at 21,056. 

Meanwhile, market capitalization of BSE-listed companies increased to Rs 428.80 lakh crore as investors wealth saw an addition of Rs 12.28 lakh crore compared to the market cap of Rs 416.52 lakh crore on Friday. 

Sensex zoomed 2,015.54 points, or 2.54 per cent to 81,470.01, while Nifty50 index rallied 625.6 points, or 2.60 per cent to 24,633.60.