Drugmaker shares have rebounded to record highs after the plunge in Japanese stocks early this month, in a sign that investors favor defensive shares amid concern that global economic growth will slow.
The Topix pharmaceutical index became the first and so far only sector to climb to a new peak last week, after a rout that saw Japan’s stock market enter a bear market, according to Bloomberg-compiled data going back to 1983. Drugmakers have gained 10% since the start of July through last week, leading advances among 33 sectors in Topix index. In the first half of the year the sector was 18th in performance, the data shows.
Pharmaceuticals are usually considered defensive stocks that are less vulnerable to economic slumps, and drugmakers outside of Japan have also done well as investors become risk averse. In the U.S., health-care shares are the third-best performers in August, from 6th place in July, among the S&P 500’s 11 industry-specific indexes. In the Stoxx Europe 600 Index, health care also ranked seventh out of 20 industries in August.
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