Analysts see no manipulation in the stock prices of Reliance group firms and attribute the rally to a string of positive news from the groups, mainly the scrapping of non-compete agreement between Mukesh and Anil Ambani camps.
Just a whiff of activity in their respective group firms is more than enough to lift the Ambani stocks pack in the coming days, as investors bet on India's richest siblings who last month called a truce, they said.
Last week, shares of Reliance Communications surged on reports UAE-based Etisalat was keen on acquiring a stake in it. Additionally, speculation about RCom reviving plans to acquire South African telecom firm MTN are also doing the rounds.
Talks between RCom and MTN in 2008 failed due to Mukesh Ambani staking claim to right of first refusal on stake in Anil Ambani group company RCom.
RCom has gained over 26 per cent, with the scrip steadily moving up to Rs 168.15 on June 4 from Rs 133.40 on May 21 on the Bombay Stock Exchange.
ADAG's Reliance Media World even hit its upper circuit on May 31 on the BSE, on reports of that it was in talks with the US-based CBS Corporation for a possible joint venture.
Reliance Media World again hit its upper circuit limit to close at Rs 61.70 on June 4 on the BSE.
"In the short term stock prices do reflect the sentiment apart from the fundamentals. The investors are enthused by the possibilities of new business opportunities," HDFC Securities head of private broking and wealth management Vinod Sharma said.
Media reports also stated that Mukesh Ambani Group's flagship RIL may consider looking at entering the telecom sector, which fuelled that company's shares on the bourses.
Reliance Industries (RIL) shares have gained 3.51 per cent in 10 trading sessions after announcement of the decision by the brothers to dump the non-compete agreement between the two groups on May 24. RIL scrip was quoted at Rs 1,030.80 on June 4 climbing up from Rs 995.75 on May 21 on the BSE.
CNI Research CMD Kishore P Ostwal said, "The shares were continuously under- performing Sensex post Lehman. Sanity is returning now. The news flow is adding flavour which will hold traders and investors to take quick call on these stocks."
"Media reports are speculative. Generally investors and speculators take positions on media reports and hence stocks prices move. Investors do support the fundamentals, for speculators sentiment matters," Ostwal added.