On February 10, 2025, the Nifty Pharma index fell by 2%, hitting an intraday low of 21,634.75. Analysts cited three main reasons for the decline in pharma stocks: concerns over upcoming US tariffs, margin calls leading to desperate selling, and stretched valuations.
Alkem Labs experienced a 7% drop, while IPCA and Laurus Labs fell by over 4% and 3% respectively. Other stocks such as Granules, Divis Labs, and Aurobindo Pharma also saw declines. The tariffs announced by Donald Trump have created uncertainty in the market, leading to a negative sentiment among investors. Margin calls have further exacerbated the selling pressure as investors rushed to liquidate their positions. Lastly, stretched valuations in the pharma sector have made these stocks vulnerable to corrections.
Despite some buying interest from domestic investors, the overall sentiment remains weak. Analysts are closely monitoring the situation to gauge the potential long-term impact on the pharma sector and investor confidence.
