Sensex jumps over 2,000 points in a relief rally after India-Pakistan truce, but pharma stocks tumble

Investors shrugged off Monday morning blues, buying across counters, in huge relief following the ceasefire signed between India and Pakistan and signs of progress in trade talks between the US and China also lifting the market mood.

The BSE Sensex soared nearly 2,200 points or 2.8 per cent to 81,652.41 and the broader NSE Nifty50 jumped over 670 points to 24,680.20.

"In a significant development over the weekend, India and Pakistan agreed to cease all military operations across land, air, and sea, which further supports a risk-on sentiment in the markets. The U.S. and China have also taken steps to de-escalate their trade conflict. The U.S. has agreed to resume trade negotiations, while China has committed to increasing imports of American goods—an encouraging signal for global markets," said Vikas Jain, head of research at Reliance Securities.

Tech, banks, metals and consumer goods companies were big gainers on the Sensex on Monday morning. Infosys, HCL Tech, Tech Mahindra, TCS and Eternal soared nearly 3-4 per cent. HDFC Bank, ICICI Bank, Bajaj Finance and SBI were up 2.0-3.5 per cent. Shares of FMCG companies, power stocks and autos also gained over 1 per cent.

Pharma stocks, however, were under pressure amid President Donald Trump's indicating plans to slash drug prices in the US. Shares of Sun Pharma tumbled nearly 4 per cent. It was the only loser on the 30-share Sensex in the morning. Other pharma stocks like Suven, Division Labs, Glenmark, and Lupin among others were also down 1 per cent or more.

Writing on the social media platform Truth Social, Trump said he plans to sign an executive order on Monday that would bring down the cost of prescription medicines by 30-80 per cent with immediate effect, reports said.

Overnight, it was quiet on the India-Pakistan border and all eyes will now be on the DGMO-level talks scheduled today. Investors will be watchful of any re-escalation of the conflict between the two countries, that could fuel further uncertainty.

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