Why Reliance Stock Fell 3.5% Despite Strong Fundamentals | Deven Choksey Explains

Deven Choksey, Managing Director of KRChoksey Shares and Securities, analyses the 3.5% decline in Reliance Industries' stock, asserting that the company's fundamentals remain 'absolutely in shape.' While acknowledging potential volatility in raw material prices impacting the oil-to-chemical business, Choksey emphasizes that the Jio and retail platforms show no adverse signs. He identifies the derivative market as the 'villain in the pack,' noting constant hammering by short sellers who capitalised on views of a falling rupee. Choksey highlights a shift in shareholding patterns over the last 18 months, where Foreign Portfolio Investors (FPIs) reduced their stake by approximately 2%, largely absorbed by Indian mutual funds. The recent price damage is attributed to technical factors and margin management requirements in the derivative market rather than fundamental failures. He concludes that the stock is a victim of market technicals and prop trade unwinding following new margin rules implemented in April.