The top four losers amongst the five on the BSE are all pharma stocks. This was the every same sector which was the toast of the street, even till yesterday but today, the tide has suddenly turned. The top loser is Torrent Pharma, down over 3%, Lupin is down 3%, Sun Pharma Advanced Research is down 2.5% and Sun Pharma is down over 2%.

This beating down of the sector has happened on the back of one FII downgrading some pharma stocks. Bank of America Merrill Lynch downgraded Sun Pharma from ‘buy’ to ‘underperform’. Similarly, it pulled down Lupin, Cadila and Cipla from ‘buy’ to ‘neutral’.  The reason – the brokerage has stated that certain stocks in the pharma sector are fully priced. To say it in its own words, “some stocks may be priced to perfection with less room for error.”

Usually, FIIs follow a herd mentality and it is widely expected that others will follow suit and thus we are seeing this spate of profit booking on the pharma counter today morning.