Healthcare and pharmaceutical stocks were in the focus on Thursday following the news of a resurgence of COVID-19 infections in China.
Pharma stocks IOL Chemicals & Pharmaceuticals Ltd, Ajanta Pharma Ltd, Sun Pharma Advanced Research Company Ltd, Lupin Ltd, Alkem Laboratories Ltd, Sequent Scientific Ltd, Zydus Lifesciences Ltd, Torrent Pharmaceuticals Ltd, and Sun Pharmaceutical Industries Ltd were among the top gainers today.
IOL Chemicals & Pharmaceuticals Ltd, Ajanta Pharma Ltd, and Sun Pharma Advanced Research Company Ltd gained 6-7 percent in today's session.
"Active Pharmaceutical Industry (API) companies, pharma formulations companies, and diagnostic companies are all buzzing during covid news flow. This is expected to continue for sometime as no one is aware of the actual ground reality as of now," said Avinash Gorakshakar, Head of Research, Profitmart Securities.
On the backdrop of rising COVID-19 cases in few countries, India's health minister issued a warning on Wednesday that the pandemic was 'not over yet'.
According to a Mumbai-based fund manager, Sandip Sabharwal, the rally in healthcare stocks is mainly sentimental, as there is no evidence of COVID-19 surge in India.
Vinit Bolinjkar, Head of Research, Ventura Securities Ltd, believes that the healthcare stocks had been doing well even before the onset of COVID-19 news.
"Most of the hospital stocks are doing well as their major capital expenditure (capex) is over, and they are sweating assets well. The onset of COVID-19 is another factor that is also pushing them higher," said Bolinjkar.
Similarly, for pharma stocks Bolinjkar said that the high base effect of the COVID-19 period is over, and the normal growth trajectory is playing out. Though headwinds on costly API imports from China could hurt them a bit.