Reliance Industries has overtaken ITC as the most influential stock on BSE benchmark Sensex, after the oil & gas major's shares soared by 3.4 per cent. At the end of trade on 17 January, 2013, RIL commanded 9.33 per cent weight in the 30-share Sensex, while ITC had 9.27 per cent weight, followed by Infosys with 8.05 per cent.
Shares of RIL ended the day 3.4 per cent higher at Rs 889.65, hitting a 52-week high and marking a second day of gains, ahead of its earnings on 18 January. The stock was also among the top gainers on the Nifty.
The RIL counter saw good buying amid government virtually deregulated diesel prices allowing "small" hikes over a period of time. "The bullishness in the stock price also stemmed from the expectation of healthy improvement in refining margins in its quarterly results," said Milan Bavishi, Head Research, Inventure Growth & Securities.
Weight of a stock is measured by the value of a company's free-float or non-promoter shares that can be freely traded in the market.
ITC had first replaced RIL as the most influential stock on Indian bourses on April 17 last year, but the very next day the energy major regained the status.
RIL also remains the country's most valued company in terms of market capitalisation. The energy major commands a market value of Rs 2,87,848 crore.
Reliance is expected to report its first profit increase after four quarters of declining profits, according to consensus of analyst estimates, Thomson Reuters Starmine data showed.
However, declining KG-D6 volumes and muted gross refining margins (GRMs) are likely to impact Reliance Industries '(RIL's) December quarter earnings. The company's petrochem segment may post better numbers on good volumes and higher base price effect, partially offsetting poor show from other businesses.
Dealers say Essar results point to potentially improving refining margins at Reliance when it posts results on 18 January. Essar Oil, which reported results earlier this week, swung to a net profit in the October-December quarter, with gross refining margins at a healthy $9.75 a barrel.
Investment bank, UBS, increased weightage on Reliance ahead of its December quarter earnings, thereby turning 'overweight' on the petrochemical sector from 'neutral' earlier.
Nomura sees over 15 per cent upside in Reliance Industries from the current levels to Rs 1000. It says an improvement in exploration and production sentiments and more positive decisions would revive the E&P investment.
According to the brokerage, the era of underperformance of the oil & gas major seems to have ended. With the Government of India (GoI) keen to end the long period of policy paralysis, decision-making has been revived and tensions between the government and contractors are finally easing.
Reliance shares have been rising on media reports that recommendations from a government-appointed panel to look at gas pricing will be submitted to the cabinet for consideration soon. The recommendations are expected to lead to higher gas prices.
Last week, Oil Minister M Veerappa Moily allowed Reliance Industries to explore for oil and gas within the producing fields subject to certain conditions. RIL had proposed to drill an exploration well on the flagging D1&D3 gas fields in the KG-D6 block to study reservoir characteristic.