Consequent to this hike, investors began flocking to counters like Reliance and IPCL. On Monday, both these stocks exhaushted the daily limit of eight per cent on BSE to close at Rs 167.35 and Rs 100.4, respectively. However on Tuesday, the stocks shed some of their gains. On Tuesday, Reliance closed at Rs 166.5, but the counter witnessed a very high volume of Rs 193.99 crore.

The price hike in major polymer and fibre intermediate products by Reliance is in the range of 4-6 per cent. This move is based on anupward trend in international prices, which is driven by production cutbacks. Reliance hasd revised prices of its products upward in the range of 3.5 to 8 per cent.Apart from the firming up of product prices, as a bonanza for the petrochem industry comes the news of a decline in the prices of naphtha prices, the main raw material.

With effect from June 1, PSU oil companies have cut naphtha prices by 2.5 per cent to Rs 8250 per kilo litres. This move is also likely to improve profit margins of RIL and IPCL. Another factor in favour of two companies is the divestment of 25 per cent stake in IPCL in favour of a strategic investor and, according to market sources, Reliance and US major Exxon Mobil have emerged as the top contenders.