SMC Capital Equity head Jagannadham Thunuguntla said, "The increase in valuations were major concerns for investors and this correction was long overdue. Fundamentals in the markets were long forgotten. For the last few days it was liquidity-driven momentum."

1. Sensex tumbles after HC ruling on RIL’s gas sale
15 Jun 2009
The Bombay High Court ruling on the market leader Reliance Industries sparked across-the-board sell-off,
pulling down the benchmark Sensex by 362.42 points amid extremely weak Asian and European cues.
This is the fifth-biggest single-day fall of the year.
As volatility became a routine affair, the market moved erratically, ending much below the 15,000 level.
The Bombay Stock Exchange 30-share barometer ended the day at 14,875.52, netting a loss of 2.38 per
cent from its previous close.
Shares of the top heavyweight RIL fell by 7.48 per cent after the High Court said Reliance Natural
Resources will get assured gas supply of 28 million metric standard cubic metres per day for 17 years at
USD 2.34 million per metric British thermal unit (mmbtu) from RIL's KG basin.
Market sources said the price set by the High Court is much lower than USD 4.2 mmbtu fixed by the
government for gas sale from the KG basin.
RNRL, however, soared 24.11 per cent as the company will get substantial benefits from the gas supply
to its power generation plants.
SMC Capital Equity head Jagannadham Thunuguntla said, "The increase in valuations were major
concerns for investors and this correction was long overdue. Fundamentals in the markets were long
forgotten. For the last few days it was liquidity-driven momentum."
Anil's Reliance Natural Resources Ltd had claimed right over 28 mmscmd of gas from KG-D6 at USD
2.34 per mmBtu, the price at which RIL had bid in a tender floated by NTPC for sourcing gas. The
Bombay High Court had earlier asked both the groups to rework the gas supply master agreement. But
they returned to the court saying they could not arrive at an amicable agreement.
Following the demerger of the Reliance group, RIL was supposed to supply gas to RNRL, to be used for
the Anil Ambani group's power plant at Dadri, Uttar Pradesh. RIL had contended that it cannot sell the
gas at USD 2.34 per mmBtu, but it would have to be sold at USD 4.20, which was the "government-
approved price".
RIL is also fighting a litigation against state-run NTPC. The state-run firm has contended that RIL execute
the contract for gas supply, while RIL said the contract was not formalised. On other hand, RNRL had
claimed that it should get the gas at the same price as NTPC.
The National Stock Exchange broader 50-share Nifty also slumped 99.40 points or 2.17 per cent to close
at 4,484.00 from its last close.
Weaknesses in Asian and European markets also weighed on investor sentiment. Asian indices ended
down by about 1.0 per cent to 4.0 per cent. However, Shanghai Composite gained 1.67 per cent.
European markets were lower by 2.0 to 2.5 per cent in their early trade.

2. Reflecting losses in RIL, the oil & gas index plunged 4.51 per cent while the metal index dipped by 3.86
per cent as LME metal prices fell sharply.
The market breadth was extremely weak due to widespread losses in the small-cap and the mid-cap
segments.
RIL moved in a wide range of Rs 2,360 and Rs 2,171.80 while RNRL hit the intra-day high of Rs 112.25,
topping the the list of business volume.
RNRL clocked the day's highest turnover of Rs 1,101.20 crore in the total volume of Rs 7,106.08 crore on
the BSE, followed by RIL at Rs 474.47 crore.
Among other major losers, Sterlite Ind was down 7.61 per cent, Tata Steel 4.77 per cent, L&T 4.76 per
cent, Hindalco 4.58 per cent, DLF 4.37 per cent, Tata Motor 4.01 per cent, REL Comm 3.77 per cent,
Mah & Mah 3.49 per cent, Sun Pharma 2.95 per cent and Tata Power 2.92 per cent.
However, Ranbaxy Lab gained 1.91 per cent, TCS 1.85 per cent, Hind Unilever 1.74 per cent, Rel Infra
1.37 per cent and Grasim Ind 1.04 per cent.