InvestorQ : What resulted in such a sharp fall in the stock price of Reliance Industries in the previous week?
Rutuja Nigam made post

What resulted in such a sharp fall in the stock price of Reliance Industries in the previous week?

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1 month ago
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For the week the impact on the benchmark indices was minimal as they closed with small gains. However, the oil and gas sector took a sharp hit on the last day. While ONGC and Oil India fell by over 13% in a single day, the stock of Reliance Industries also tanked by 7% on Friday, something you don’t get to see too often. While weaker oil prices were surely one reason, the bigger trigger for the sharp fall in RIL was the decision by the government to impose a windfall tax on oil extractors to share some of the benefits of high crude prices.

On Friday, the stock of Reliance Industries fell by 7.3% to close at Rs 2,406 and effectively it dragged the Sensex lower by 565 points. In fact, effective July 01sts, the windfall tax would apply at two levels. Firstly, it would be imposed at a flat rate on the total output of domestic crude oil. Secondly, there would be an additional export tax on petrol and diesel on the exports outside India, in order to encourage the use of domestic oil from domestic purposes only. This will benefit the government and the downstream users amid rising prices.

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