Sensex tops 6,500 as RIL scrip hots up

Hopes among market players of an early end to the ongoing ownership dispute in the Reliance group and an attractive buyback price pulled up the Reliance Industries stock on Friday.

The benchmark Bombay Stock Exchange Sensex whizzed past the 6500 level in intra-day trades, but closed a little lower.

Rahul Rege, head of equity sales at Sharekhan said, "One of the main triggers for Friday's rise was the Reliance scrip."

This was a genuine fundamental driven rally and the market would see a further upside, though with intermittent corrections.

The Reliance Industries scrip has gained almost 9 per cent in the last four trading sessions after the buyback announcement.

The counter has moved up from Rs 480.65 on Monday to Friday's close of Rs 523.60, up 8.94 per cent. As a result, Reliance Industries market capitalisation has increased by almost Rs 6,000 crore in the last four trading sessions to Rs 73,114 crore on Friday.

Thus, the company has captured about two-thirds of the market capitalisation that had eroded since the spat between the brothers came out in the open.

Reliance Industries' market capitalisation had eroded by about Rs 9,000 crore: from Rs 76,207 crore on November 18 to Rs 67,117 crore on Monday, as the stock fell from Rs 543.75 to Rs 480.65 over this period.

Market players added that continued strong foreign funds inflows and lower international oil prices provided the backbone of the positive sentiment. Blue-chips saw good buying support by institutions.

Metal, oil and consumer durables scrips were among the biggest gainers on Friday while capital goods and FMCG companies recorded some losses. The National Stock Exchange Nifty also recorded a new closing high on Friday.

The Tata Steel scrip was the biggest gainer in the Sensex basket, gaining 3.70 per cent to close at Rs 359, followed by Reliance Industries. HPCL was up 2.72 per cent to Rs 385.05, ICICI Bank gained 2.10 per cent to Rs 371.45 and HDFC Bank was up 1.79 per cent to Rs 501.50.

Reliance Energy was the biggest loser in the Sensex basket, falling 0.99 per cent to close at Rs 529.75, followed by Tata Power (down 0.67 per cent to Rs 380.25). Bhel fell 0.63 per cent to Rs 725.60, HLL fell 0.52 per cent to Rs 144 and Bajaj Auto was down 0.43 per cent to Rs 1126.55.

Brokers said that continued foreign fund inflows had helped the market post record highs. Expectations of a healthy growth in corporate earnings is also fanning the positive sentiment, they added.

Institutions continue to buy in frontline scrips while retail action is being seen in the mid-cap counters. The breadth of the market was positive with gainers outpacing losers 10:7. In the Sensex basket, 16 out of the 30-scrips closed higher.

Foreign funds were net buyers of Indian shares worth Rs 236 crore on Thursday and have bought shares net worth Rs 5039.30 crore in December so far, data released by the Securities and Exchange Board of India show.

The BSE Sensex hit a high of 6507.94 and a low of 6463.18 in intra-day trades before closing at 6498.06 up 56.21 points (0.87 per cent) from Thursday's close.

Volumes were higher than on Thursday in the cash segment of the bourses; the BSE reported a turnover of Rs 2238.51 crore and the NSE reported a turnover of Rs 4884.55 crore.