Monday kicked off on a positive note for most of Dalal Street, but the Nifty Pharmaceuticals Index is casting a shadow over the day’s optimism. This sector has seen a noticeable drop of 2.05%, landing at 20,640.40, which starkly contrasts with the upward trend enjoyed by other indices in the market.

Trump’s Bold Move to Cut Drug Prices

In an announcement that has sent ripples through the pharmaceutical sector, U.S. President Donald Trump took to social media to declare his intention to sign an executive order aimed at slashing drug prices by an astonishing 30% to 80%. This new initiative, termed the “most favored nation” policy, will ensure that the U.S. pays the same prices as the country with the lowest drug costs globally.

• Key Points:
  • Trump’s announcement is expected to occur on Monday morning, U.S. time.
  • The executive order could significantly impact the stock prices of pharmaceutical companies.

Market analyst Ajay Bagga commented, "As President Trump is set to sign this order around 9 AM ET, we anticipate that pharmaceutical stocks will experience some downward pressure." He also noted that Trump’s upcoming Middle East tour might bring about new energy, defense, and strategic procurement deals.

Nifty Pharma Faces a Challenging Day

Upon opening, every stock within the Nifty Pharma index found itself in negative territory. While many managed to recover as the day progressed, Sun Pharma emerged as the sector’s biggest loser. Its shares plummeted 7%, hitting an intra-day low of Rs 1,623.60 on the National Stock Exchange.

Other notable declines included:

• Aurobindo Pharma: Down 3.8% to Rs 1,119.90.
• Biocon: Fell 3.6% to Rs 317.90.
• Both Lupin and Glenmark Pharmaceuticals dropped 3%.

Sun Pharma’s Recent Struggles

The struggles for Sun Pharma have been ongoing, with the stock price decreasing by 7.5% over the last five trading days. In the past month, it has shed 1.5%, and over the last six months, the decline stands at 6.66%. However, it’s worth noting that on a yearly basis, Sun Pharma has managed to gain 10%.

The current market dynamics underscore the challenges ahead for the pharmaceutical industry, especially in light of Trump’s proposed reforms. Investors should stay vigilant and monitor these developments closely as they unfold.