Whenever diversified conglomerate Reliance Industries' stock has closed 5% or higher, the gains have historically lifted the benchmark Nifty 50 index over the next month. On November 2, the firm's shares rallied 8% as the firm's latest quarterly earnings fueled optimism.
According to an analysis of Reliance Industries' share price by Ashish Gupta, a Singapore-based trader, a strong move in the heavyweight stock has often translated into strong returns for the index.
In the last 20 times, when Reliance Industries' shares settled at least 5% higher after a single session of trade, the Nifty 50 index has delivered a medium return of 3.4% in the next 21 trading sessions. Of the 20 instances, the benchmark closed higher 17 times.
Over shorter periods, the trend is less pronounced. The Nifty rose by a median of 0.1% on the next trading day, closing higher in 12 of the 20 instances. Over the next five sessions, the median return stood at 1%, with the index rising 14 of 20 times.
The counter's market capitalisation jumped to a record-breaking Rs 17 lakh crore as the shares marked its largest intraday gain in over six years. The gains in the index also contributed to the rally seen in the headline indices Nifty 50. Over half the gains from the 170 point jump came from RIL shares, which contributed 91 points to the index.