Sensex tanks 267 points; RIL down, RNRL gains in early trade
The stock market today opened sharply lower with a 267-point dip on the benchmark Sensex in early morning trade, primarily due to a sharp plunge in shares of heavyweight Reliance Industries.business Updated: May 07, 2010 10:03 IST
The stock market on Friday opened sharply lower with a 267-point dip on the benchmark Sensex in early morning trade, primarily due to a sharp plunge in shares of heavyweight Reliance Industries.
Ahead of a Supreme Court verdict on the dispute between RIL and Anil Ambani group firm RNRL, the shares of Mukesh Ambani-led firm dipped by over one per cent to below Rs 1,000 level.
However, the RNRL stock was trading up in early trade.
The Sensex dipped by as much as 267 points within minutes of the opening bell, but recovered some of the lost ground and was trading 194 points down at 16,793.87 points at 0900 hrs.
RIL shares were trading 1.23 per cent down at Rs 998, while RNRL was up 4.4 per cent at Rs 71.35.
Analysts said that the shares of RIL and RNRL were in focus today due to an expected Supreme Court verdict on the nation's most talked about corporate battle over gas supply, the outcome of which will shape the future of flagship energy firms run by brothers Mukesh and Anil Ambani.
"The market is keenly awaiting the judgement of RIL-RNRL case and the verdict would have significant impact on investor sentiments. Both the stocks would be in focus," Geojit BNP Paribas Financial Services Research Head Alex Mathews said.
"Once the decision is out it will be good for the market, whichever way the verdict goes, as it will remove the uncertainty," Purpleline Investment Advisors Director & CEO P K Agarwal said.
Shares of RIL yesterday closed nearly one per cent down at Rs 1,010.90, while RNRL shares fell marginally up to Rs 68.35 on the Bombay Stock Exchange.
"The Supreme Court's verdict would certainly have an impact on the movement of the market. RIL, being a heavyweight stock, would guide the movement in the key indices," Bonanza Portfolio Assistant VP (Research-Equity) Avinash Gupta said.
The dispute between Reliance Industries and RNRL, the companies led by billionaire brothers Mukesh Ambani and Anil Ambani respectively, is over supply of 28 million cubic meter of gas a day to RNRL by RIL.
RNRL is seeking gas from RIL's KG-D6 gas fields at $2.34 per mmBtu, 44 per cent lower than the government set price, for its proposed 7,800 MW power plant at Dadri.
While, RIL's contention is that it cannot sell gas at a price less than $4.20 per mmBtu as set by the government and to customers other than those identified in accordance with the Gas Utilisation Policy (GUP).