Stock Market: Pharma rallies as FIIs drive bourses

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By S Jha

New Delhi, September 20: After an extraordinary rally in 2020 following the Civid-19 pandemic, the pharma stocks had given multiple returns in a few months, while losing the sheen next year to become the laggard on the bourses.

On Tuesday, the pharma stock gave signs of waking up after deep slumber. With the foreign institutional investors returning to the Indian market after over 15 months of selling, the investors are guessing the sectoral targets of the hot money.

The FIIs on Tuesday bought a net of Rs 1196 crores, while the domestic institutional investors also seemed pausing their sell mode by pumping in a net of Rs 132 crores.

The institutional buying sent the bourses on the higher trajectory even while the equity markets are keeping close eyes on the commentary from the Fed meeting this week, which will have matching response from the Reserve Bank of India, as anticipated by the market players.

In the current phase of the FIIs coming back to the Indian equity market, the auto sector, principally the two-wheelers, has looked a clear winner, with the likes of Eicher Motors, Bajaj Auto, Hero Motocorp outperforming the market, along with the private banks.

In the banking sector, the initial outperformers have been the IndusInd Bank, ICICI Bank, while Kotak Mahindra Bank and Axis Bank has also been rallying.

Following the auto and the banking sector, the Tuesday session belonged to the pharma sector as Cipla, Sun Pharma, Apollo Hospital, Dr Reddy Labs and so on strongly rallied. There was profit boking in the private defence sector stocks.

Apollo Hospital share which has been flat for about a year had zoomed by over seven per cent during the session to close with a gain of 5.75 per cent. In its last rally, this share had touched the level of Rs 6000, while it’s now trading at Rs 4565 level.

Sun Pharma, the most laggard of the pharma shares, has been a clear outperformer, zooming by over four per cent, while trading at Rs 911 a share.

Cipla, the pharma heavyweight, was also up by over 5.52 per cent, as it closed the day at Rs 1093. Dr Reddy also gained over two per cent on the bourses.

Among the small cap in the pharma sector, Jubilant Pharmova gained over 11 per cent on the bourses.

(Disclaimer: There is no suggestion here being made for buy or sale of any share, and investors should consult qualified consultants registered with SEBI before making any decision)