Stocks

Reliance Industries sets new record as stock up

PALAK SHAH Mumbai | Updated on March 25, 2020

21 per cent in a day on short covering

With 21 per cent gains in Wednesday’s trading session, the share price of Mukesh Ambani-led Reliance Industries (RIL) registered a new record of rise in a single trading session. Before today, RIL has never hit 20 per cent gains in a single trading day since screen based trading was launched by the National Stock Exchange (NSE) in mid-1990s, analysts said.

RIL’s share price gained after global news media reported late evening on Tuesday that Facebook was picking up a 10 per cent stake in its telecoms arm Jio. The deal for the first time would give correct estimates of the worth of Jio, analysts said.

Analysts say, the news also marks that telecoms sector woes may not worsen from here. RIL is the highest weighted stock in Sensex and Nifty and such massive gains in the counter has significant market wide impact. The Sensex and Nifty, which have been on a crash course for more than two weeks now, rose by nearly 8 per cent during the trading session. Sensex gained 2000 points at around 2.15 pm and was trading near 28,800. Nifty index has gained nearly 600 points to touch of high of around 8,400.

Intra-day

“Short sellers may have lost their shirt in the RIL counter today. The company earlier has struck more bigger deals at international level but never has there been such rush that propelled the stock up by 20 per cent. History has shown that whenever RIL scrip has witnessed such violent moves on the up and markets are emerging from a massive fall, the bottom for benchmark stock indices are too close. No short seller will make another attempt to play in RIL in the near future,” said Kishor Ostwal, CMD, CNI Global Research.

Short-selling in RIL has been high since the company this year said that its estimated $20 billion deal with Saudi's Aramco would be delayed. Markets estimate RIL's total debt to be more than Rs 2lakh crore. Nobody was expecting any big news of a stake sale deal in RIL so soon, Ostwal said.

RIL’s share price hit a high of Rs 1,152 on the BSE and its intra-day low was Rs 951. India is the biggest market for Facebook with 328 million monthly users and the company’s WhatsApp messaging app has 400 million users in the country.

Published on March 25, 2020

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