Oil scrips drag Sensex down 177 points

With heavy sell-off in the Reliance Industries scrip, stock markets gave in to a bout of robust profit booking today after more than seven trading days of strong gains.

More than Rs 600 crore worth of Reliance Industries shares, which lost 5.26 per cent of its value, were traded on the Bombay Stock Exchange alone, second only to the turnover of its debutant subsidiary Reliance Petroleum which clocked a turnover of more than Rs 641 crore on the BSE today.

Foreign Institutional Investors sold equities worth Rs 979.92 crore in the secondary market, including shares of the newly listed Reliance Petroleum, today. It is their biggest single-day net sell or buy since the beginning of the year and the second highest in the last 12 months.

On June 13 last year, they had trimmed their position by more than Rs 2,100 crore.

Led by Reliance Industries, which enjoys a 11.6 per cent weighting on the Sensex, the benchmark index on the BSE lost nearly 177 points or 1.4 per cent to end at 12,612 points today, while the Nifty lost nearly 1.42 per cent to 3,701 points. The biggest loser on the Nifty, too, was Reliance Industries, followed by HCL and Tata Steel.

Today was the first time the Sensex failed to make a new closing high since the beginning of the month.

"There is no apparent reason for the sell-off on RIL, except perhaps that people may have started booking profits on the stock which had run up quite a bit in the short-term," said Raj Gandhi, oil and gas analyst at Angel Broking.

Reliance Industries had put on nearly 41 per cent in the last one month since the conclusion of the initial public offer of its yet-to-be-started refining subsidiary in which it holds around 80 per cent stake. During the same period, the Sensex gained just 10 per cent.

Thanks to the price-fall, nearly all the other oil-stocks, too, ended down, despite reports of an impending increase in oil retailing prices. Essar Oil lost more than 5 per cent to end at Rs 577.35. It was followed by BPCL with a 3.1 per cent drop despite being one of the biggest possible beneficiaries of a rise in end-oil prices.

On the BSE, the oil and gas index, on which Reliance Industries has more than 56 per cent weightage, was down a hefty 4 per cent.

Of the top six most widely traded stocks on the BSE today, four belonged to the former Reliance Industries group, with both Reliance Capital and Reliance Communication Ventures also losing ground by 1 per cent and 4.6 per cent, respectively. Nearly 61 per cent of the stocks on the BSE declined in value, while 26 of the 30 Sensex stocks and 81 of the BSE 100 stocks, too, ended in the red.

VSNL, HDFC and Hindalco were the major gainers in the Nifty Index with the telecom company rising by 2.36 per cent to Rs 491.30. HDFC put on 2.05 per cent to end at Rs 1,390.70, while Hindalco moved up by 1.57 per cent to end at Rs 243.20.