The benchmark Sensex soared to a new high to close at 13,282 last Friday, but the week was dominated by the turmoil in Reliance Industries shares which have a 11.6 per cent weightage in the 30-share index. Reliance shares have been on a roll ever since the Ambani brothers carved up Dhirubhai's empire into two. But a downgrade by Kotak Institutional Equities on November 7, along with concerted selling pressure did what a fire at its Jamnagar refinery had failed to do — it caused the share price to drop a sharp 3 per cent. Interestingly, Kotak has persistently predicted under-performance by Reliance, so its view that “we are unable to justify Reliance’s current rich valuations on weakening fundamentals and publicly available information”, should not have surprised the market. The new element this time was a sudden burst of selling by the Jain community, which traditionally refuses to invest in companies dealing in non-vegetarian food or any industry that involves animal slaughter or processing. Their selling was triggered by reports that Reliance Retail planned to stock non-vegetarian food at its malls. Typically, the selling was immediately countered by fire-fighting from the Reliance group and the share bounced back. RIL plans to raise $2 billion next week. The company quietly clarified non-vegetarian food will not be sold within Reliance retail malls, but through a separate company that will be given its own space adjacent to each mall. Despite the assurance, its brokers had to work hard to sell this strategy to Jain investors by pointing out how they do not, after all, refuse to wear leather shoes or sit next airline passengers who eat non-vegetarian.

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