Software stocks gave way to pharma stocks, especially those of multinationals. Scrips like Glaxo, SmithKline Pharmaceuticals, E Merck, Rhone Poulenc, German Remedies and Parke Davis froze at the upper end of the circuit.

As many as 12 pharma stocks in the BSE's A group shot up to record substantial gains. Domestic pharma companies like Ranbaxy, Sun Pharma, Wockhardt, Dr Reddy's and Dabur followed suit. Ranbaxy froze at the upper end of the circuit with an outstanding order of over one lakh shares on the National Stock Exchange.

After a substantial fall from their peak in March-April this year, pharma stocks have been more or less subdued. So now, what does this rally in pharma stocks indicate? Marketmen feel that the financial performance by pharma companies, barring a few, has beenexcellent. The fall from the March-April highs coupled with the decent earnings has made pharma stocks attractive and the rise was inevitable.

The recovery in these stocks in the past few sessions has been swift, but gone unnoticed. Gains in pharma stocks have been in the range of 9 per cent to 50 per cent. Stocks like Glaxo, Pfizer and Knoll Pharma have risen by over 20 per cent each in the past five to six tarding sessions. Ranbaxy and Sun Pharma have shown a much higher appreciation in the same period. Ranbaxy has skyrocketed by almost 50 per cent on the back of news of a likley sell-off by the promoters in the near future coupled with rumours of the sale of a molecule developed by Ranbaxy for around Rs 450 crore.

Even after the recent spurt in the past five to six trading sessions, most of the scrips are still at a distance from the highs recorded in March-April this year. SmithKline at Rs 355 is still trading at a 44 per cent discount to its March high of Rs 640. Parke Davis at Rs 331 is 32 per centaway from its March high of Rs 488. As many as 10 companies from 16 big pharma companies are trading at a discount of over 10 per cent to their highs recorded in March or April this year. Ranbaxy has been an exception, touching new highs post-bonus.