Reliance Industries, India’s third-biggest company by market capitalization, surged more than 5 percent on Monday, after the conglomerate and its partners said on Friday they had made a significant gas discovery in the KG-D6 block.
Niko, the Canadian oil and natural gas producer which partners with Reliance and BP, said the discovery is expected to add to gas resources in the block without revealing potential reserves.
The blue-chip stock ended with gains of 5.3 percent at 828.30 rupees, posting its biggest single-day percentage gain since Sept 14, 2012. The stock, however, is still down around 13 percent from its 2013 high hit on Jan 21.
“The outlook looks quite positive,” said R K Gupta, managing director at Taurus Mutual Fund, adding that the stock could touch 1040 rupees if it manages to cross resistance at 870 rupees.
The oil ministry moved a cabinet note last week to raise the price of natural gas produced by firms such as Reliance to $6.7 from $4.2 per million metric British thermal unit presently. An increase in gas prices will be another trigger for the stock, Gupta said.