The pharmaceutical scrips failed to sustain the upward trend exhibited during the earlier part of the week ended August 26, 2005 mainly due to lack of buying support from FIIs and retail investors. The BSE Healthcare index of major 23 pharma companies closed at 3008 on August 26 as compared to 3038 a week ago. The index touched to the 52 weeks peak level at 3096 on August 22, 2005. The market players were expecting sustained buying support from FIIs and Indian Financial Institutions as well as mutual funds. Instead, the FIIs were sellers and booked the profit at every level. The analyst pointed out that the investors took a cautious attitude and adopted a wait and watch policy.

The BSE Healthcare index opened at 2995 on August 26 and reached at intra-day highest level at 3027, but the same was declined to 3008 at the close of the day on account of depressed sentiments. Out of the 23 companies, 15 scrips moved up during the trading session and 8 scrips declined from the previous close. Major scrip like Ranbaxy Laboratories, Lupin, Glenmark, GlaxoSmithKline, IPCA and Wyeth nose-dived at the close of the day. However, Divi’s Lab moved up by Rs 86.80 to Rs 1460.20 on sustained buying support. Wockhardt Ltd went up by Rs 15.45 to Rs 501.80 and Pfizer moved up by Rs 13.25 to Rs 805 at the close of the session.

The pharma analyst expressed views that the healthcare scrip will see some sort of correction at current price level. Despite improved in fundamentals during the first quarter of the current year, the pharma scrips saw some adverse volatile movements. Pharma MNCs also experience the same volatile movement during the week. The BSE Sensex of 30 companies saw some very abnormal movements during the week. The Sensex crashed by 134 points to 7615 on August 23 affecting the overall sentiment of investors. Thereafter every body was looking opportunity to sell at higher price, which created heavy selling pressure in the market.

It is expected that the pharma companies will be able to further push up top line and bottom line in the current quarter also. This may give some relief to them to build up investor’s confidence in coming trading sessions. AstraZeneca recently announced improved performance and this may followed by other companies also. The growth in the manufacturing index and higher exports by the pharmaceutical industry during 2004-05 despite stiff competition in the regulated market will give necessary sustain support to scrip movements.