Monday was a bad day for Reliance Industries Ltd [RIL] at the stock market and otherwise. On the one hand, Morgan Stanley cut its rating to ‘underweight from ‘equal-weight’, citing lack of near-term triggers, expectations for weaker refining margins and valuation and on the other its stocks got a beating.
RIL was the top loser from the Sensex pack with a fall of 4.51 per cent and alone extracted over 80 points from the Sensex. Besides RIL, other heavyweights like L&T, SBI, Infosys, ICICI Bank, Tata Motors, ONGC, BHEL, TCS, Hindalco, HUL and Tata Power also suffered heavy losses.
Morgan Stanley also cited concerns about Reliance’s investments into businesses that offer 'low' return-on-equity, as well as a subdued outlook on petrochemicals in a noted on Monday. It cut Reliance's price target on the stock to Rs 703 from Rs 742. Reliance shares closed down at Rs 818.70 on the Bombay Stock Exchange. It pulled the Sensex down for the second session in a row, plunging it by over 229 points to end at over one-week low of 18,708.98.
Reliance’s key gas producing fields off the Andhra coast could be exhausted in five years, Morgan Stanley analysts said in a report. As the probable reserves at its D6 block decreased to 1.9 trillion cubic feet, the market research firm based its estimates on these numbers. Its Canadian partner Niko Resources made these estimates, which has a 10 per cent stake in the D6 block in the Krishna Godavari basin. Reliance has 60 per cent share in the field and BP the rest 30 per cent.
RIL was the top loser from the Sensex pack with a fall of 4.51 per cent and alone extracted over 80 points from the Sensex. Besides RIL, other heavyweights like L&T, SBI, Infosys, ICICI Bank, Tata Motors, ONGC, BHEL, TCS, Hindalco, HUL and Tata Power also suffered heavy losses.
Morgan Stanley also cited concerns about Reliance’s investments into businesses that offer 'low' return-on-equity, as well as a subdued outlook on petrochemicals in a noted on Monday. It cut Reliance's price target on the stock to Rs 703 from Rs 742. Reliance shares closed down at Rs 818.70 on the Bombay Stock Exchange. It pulled the Sensex down for the second session in a row, plunging it by over 229 points to end at over one-week low of 18,708.98.
Reliance’s key gas producing fields off the Andhra coast could be exhausted in five years, Morgan Stanley analysts said in a report. As the probable reserves at its D6 block decreased to 1.9 trillion cubic feet, the market research firm based its estimates on these numbers. Its Canadian partner Niko Resources made these estimates, which has a 10 per cent stake in the D6 block in the Krishna Godavari basin. Reliance has 60 per cent share in the field and BP the rest 30 per cent.