Why Pharma Sector Stocks Have Risen in the Last 9 Months?

With the outbreak of the COVID-19 pandemic, many economies faced recession. People couldn’t help but pull their hard-earned money out of the share market. Panic selling wasn’t only seen in grocery stores and retail outlets. In fact, the stock market also experienced the panic sale of stocks.

Over the past few months, the stock value of the pharmaceutical industry, however, has witnessed growth. Even though there is no vaccine for COVID-19 launched yet, people are buying the shares of Pharma industries as they anticipate the growth of this sector in the coming months.

There is no denying that the COVID-19 has pushed the Indian stock market to the bearish side.

Growth of the Pharma Industry amid the Global Pandemic

In the middle of this global pandemic and a health crisis, investors have started to realize the potential of the pharmaceutical industries.

While all industries have faced challenges during this ongoing crisis, the stocks of the pharma companies have grown over the past 9 months. It seems like the traders are on a shopping spree. Almost all types of pharma companies (except for a few) are closing with great profits every single day.

This change was noticed right after the coronavirus outbreak in India. As the government declared a 21-day lockdown in the nation, people started to invest in the pharma shares to grow their money.

Some of the main factors that are fueling the growth of the pharma sector are:

·      An increased demand for generic and branded drugs

·      India being one of the biggest suppliers of the drugs

·      The rising pharma global trend

The Nifty as well as S&P BSE Healthcare Pharma witnessed a growth of 42% and 36% respectively. This sudden growth in the shares of the Pharmaceutical sector has introduced plenty of investment and day-trading opportunities for investors. Not only the pharma sector, but the diagnostic labs have also grown in the past nine months in terms of their stock value. The stock value of two of the biggest diagnostic labs in India, i.e. Thyrocare and Dr. Lal Pathlabs went up to 14% and 20% on 16th April 2020. One of the main reasons for this growth stock price of the pharma industry was the increasing awareness of health and wellness. Another reason was the growing number of patients seeking medical care for the diagnosis and regular checkups.

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The Share Market A Guide to Trading (2)

The Share Market: A Guide to Trading – Gill Broking

It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

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