Shares of Reliance Industries ignored broader market weakness and hit a record high in early trading today. RIL shares rose 1% to $2,802, giving it a market capitalization of $19 lakh crores.
Reliance shares opened today with a gap down almost $20 per share, but soon began to rise. Within minutes of the opening bell, he reached his new all-time high of $2,826 per share on NSE, posting an increase of around 1.25 percent in morning trading. During this course, the Sensex heavyweight became the first Indian company to reach $19 lakh crore market capitalization as well.
According to stock market insiders, Singapore’s GRM rising to a record high is the main reason for Reliance Industries’ share price rally and its market capital hitting $19 lakh crores. They said that after each US dollar increase in Singapore GRM, Reliance Industries earnings increase by around $4 and in the post-Russia-Ukraine war, Singapore GRM has risen to between $7 and $8 dollars.
Speaking about the reason for the increase in Reliance’s share price and its market capital, Avinash Gorakshkar, Head of Equity Research at Profitmart, said: “This rally in Reliance’s shares can be attributed to the increase in GRM (margin). gross refining) in Singapore. Reliance Industries Limited profits grow around $Increase of 4 per dollar in GRM. With Singapore’s GRM soaring to between $7 and $8, the market expects strong figures for the fourth quarter of FY22 from Reliance’s petrochemical business.”
Avinash Gorakshkar of Profitmart Securities added that rising crude oil prices are the main reason for GRM’s rise as it provides a margin benefit to big petrochemicals like Reliance.
Echoing the views of Avinash Gorakshkar; Santosh Meena, head of research at Swastika Investmart Ltd, said: “Reliance Industries is firing on all cylinders as its petrochemical business is doing extremely well on the back of a surge in oil and gas prices, where Singapore’s GRM is at its high point Its telecommunications business is not affected by geopolitical tension and inflation, while it is exploring synergies in its retail business It is continuously expanding its path in the renewable energy business, which opens up more opportunities for business”.
“Technically, Reliance’s involvement has created a solid foundation in the $The 2250 mark then witnessed a smart rally where the formation of a descending channel was broken which is leading to a new bullish momentum. On the positive side, it has the potential to move to the $3000 mark. down, $2500 should act as a strong and immediate support level.”
Disclaimer: The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of the Mint.