With the stock market perceiving that the CAG report on RIL would not be as bad as it was expected to be, the scrip gained Rs 21.8 or 2.62 per cent on Thursday to close at Rs 853.5 on Wednesday.

Experts said they were baffled about how a stock could move up on negative news. “There was rumour on a possible buyback by the company and how people were taking positions in the F&O segment to make money out of this announcement,” said an oil and gas analyst at a multinational brokerage.

Market-men said that the negatives had already been factored in the price of RIL when it had touched Rs 713.55 a share on August 26 and hence the only it way it could go was upwards.

“The stock had fallen from the 1100 levels to the 700 levels and buyers were bound to take positions at such an attractive price,” said Mr Abbas Merchant, Senior AVP Research- Jaypee Capital.

The announcement made a couple of days ago by British Petroleum (RIL's joint venture partner in KG D6) that they would be able to ramp up production in the KG basin in the next two years also acted as a boost.

“Buying had to emerge at some point and most large caps have actually gained 12-15 per cent in the last fortnight and Reliance is no exception,” said Mr Alok B Agarwal, an independent market analyst. ‘”The company has a huge positive free cash flow and when its price came into the value zone, buying started automatically.”

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