Nifty Pharma tanks 3% on Trump's tariff threat; Zydus, Lupin down upto 10%

Pharma stocks in focus: Pharma stocks were under pressure on Wednesday, February 19, 2025, with Nifty Pharma index plunging up to 3.19 per cent to hit an intraday low of 20,299.95.

 

The decline in pharma stocks followed comments from President Donald Trump, who indicated that the US may impose tariffs of around 25 per cent on pharmaceutical, automobile, and semiconductor imports, with a possible announcement set for April 2. 

 

When asked about tariffs on pharmaceutical drugs and semiconductor chips, Trump stated, “It’ll be 25 per cent and higher, and it’ll go very substantially higher over the course of a year.” 

 

 

Trump also said he wanted to give companies “time to come in” before announcing new import taxes. 

 

Among individual stocks, Aurobindo Pharma was hit the hardest, plunging 9.51 per cent to an intraday low of Rs 1,052.70 per share. Lupin followed with a 5.99 per cent drop at Rs 1,892.75. 

 

Other companies that saw major declines included Ajanta Pharma (4.34 per cent), Zydus Life (6.44 per cent), Dr Reddy’s Laboratories (5.83 per cent), Cipla (3.76 per cent), Sun Pharma (3.03 per cent), Laurus Labs (3.38 per cent), Glenmark (2.55 per cent), Abbott India (2.30 per cent), Biocon (2.54 per cent), Ipca Labs (2.90 per cent), JB Chemical (3.38 per cent), Granules India (2.48 per cent), Torrent Pharma (1.85 per cent), Alkem Labs (2.06 per cent), Natco Pharma (3.10 per cent), Gland Pharma (1.91 per cent), Divis Labs (1.70 per cent), and Mankind Pharma (0.79 per cent).

 

According to analysts, the US President Donald Trump’s announcement to impose 25 per cent tariffs on imported automobiles, semiconductor chips, and pharmaceuticals is expected to have a major impact on global trade. 

 

As a result, they believe, the Nifty Pharma Index dropped over 3 per cent, hitting an intraday low of about 20,300 today.

 

“Trump’s intention behind this move is to strengthen domestic manufacturing. In response, the Indian government has scheduled a bilateral meeting with the US administration in Washington D.C. to discuss the trade implications further. According to research, India exports only 0.2 per cent of cars to the US, but the proposed tariff could severely affect Indian pharmaceutical companies, as they export approximately 38 per cent of their drugs to the US,” said Ravi Singh, SVP of retail research at Religare Broking. 

  Meanwhile, technical experts said that Nifty pharma index witnessed a sharp decline of nearly 550 points in the current session, indicating strong selling pressure. However, a recovery is underway, suggesting buyers are stepping in at lower levels. A bullish divergence is observed on the hourly chart, signalling potential strength and a possible trend reversal.  "If the Pharma index manages to close above the crucial 21,150 level on a daily basis, it could confirm further upside momentum in the coming sessions. A sustained breakout above this resistance may attract fresh buying interest, leading to higher levels. Traders should monitor price action around 21,150 for confirmation. Overall, if this level is reclaimed and held, the sentiment may shift positively, favouring bulls in the near-term," said Jigar S Patel, senior manager, equity research, Anand Rathi.