Reliance Infrastructure Ltd Hits Lower Circuit Amid Heavy Selling Pressure

Intraday Price Movement and Volume Analysis

Reliance Infrastructure Ltd (stock code 400868), a key player in the power sector, witnessed a sharp decline today, hitting the lower circuit of ₹119.73, down ₹6.3 or 5.0% from the previous close. The stock opened with a gap down of 3.55%, signalling immediate bearish sentiment among investors. Intraday trading saw the price fluctuate between a high of ₹123.0 and the circuit low, with the weighted average price skewed towards the lower end, indicating that most volume was traded near the day's low.

Trading volumes were substantial, with total traded volume reaching approximately 6.88 lakh shares, generating a turnover of ₹8.27 crore. Despite this liquidity, delivery volumes have sharply declined, with only 1.22 lakh shares delivered on 5 Feb 2026, down 50.58% compared to the five-day average. This suggests a reduction in genuine investor participation, with short-term traders and speculators dominating the session.

Market Context and Relative Performance

Reliance Infrastructure’s performance today was notably weaker than its peers and broader market benchmarks. The stock underperformed the power sector, which declined by a modest 0.3%, and the Sensex, which fell 0.41%. Over the past two trading sessions, the stock has lost 9.75%, reflecting sustained selling pressure and negative sentiment. The current price is just 4% above its 52-week low of ₹114.94, underscoring the stock’s vulnerability and proximity to multi-month lows.

Technical indicators also paint a bearish picture. The stock is trading below all major moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a downtrend across short, medium, and long-term horizons. This technical weakness is likely to deter fresh buying interest until a clear reversal pattern emerges.

Investor Sentiment and Rating Update

MarketsMojo’s latest assessment downgraded Reliance Infrastructure Ltd from a “Sell” to a “Strong Sell” rating on 5 Feb 2026, reflecting deteriorating fundamentals and heightened risk. The company’s Mojo Score stands at a low 26.0, signalling weak financial health and poor growth prospects relative to its peers. The market cap grade is 3, categorising it as a small-cap stock with limited institutional interest and higher volatility.

The downgrade and negative sentiment have contributed to the stock’s sharp decline and circuit hit. Investors appear to be exiting positions amid concerns over the company’s operational challenges and sector headwinds. The power sector itself is facing regulatory uncertainties and fluctuating demand, which further compounds the stock’s risk profile.

Supply-Demand Imbalance and Circuit Breaker Impact

The lower circuit hit today indicates that the stock reached the maximum permissible daily decline of 5%, triggering automatic trading halts to prevent further freefall. This mechanism is designed to curb panic selling and allow investors to reassess positions. However, the unfilled supply of shares at the lower price band suggests persistent selling interest outweighing buying demand.

Such a scenario often reflects a lack of confidence among market participants, with sellers unwilling to accept prices above the circuit limit and buyers hesitant to step in amid uncertainty. The stock’s liquidity remains adequate for moderate trade sizes, but the sharp fall and delivery volume contraction highlight a cautious investor base.

Outlook and Strategic Considerations

Given the current downtrend and negative rating, investors should approach Reliance Infrastructure Ltd with caution. The stock’s proximity to its 52-week low and sustained underperformance relative to sector and benchmark indices suggest limited near-term upside. Fundamental concerns and technical weakness may keep the stock under pressure until there is a clear catalyst or improvement in financial metrics.

For long-term investors, monitoring quarterly results, regulatory developments, and sector dynamics will be crucial before considering accumulation. Short-term traders may find opportunities in volatility but should be wary of further downside risks and circuit hits.

Sector and Market Implications

The power sector, while essential, has been grappling with multiple challenges including tariff disputes, fuel supply constraints, and regulatory changes. Reliance Infrastructure Ltd’s struggles are emblematic of broader sectoral pressures that have weighed on investor sentiment. The stock’s sharp fall and lower circuit hit may prompt investors to reassess exposure to small-cap power stocks, favouring larger, more stable companies with stronger balance sheets.

Benchmark indices like the Sensex have shown resilience despite sectoral weakness, highlighting the selective nature of current market corrections. Investors are advised to maintain a diversified portfolio and consider quality metrics alongside price action when evaluating stocks in volatile sectors.

Summary

Reliance Infrastructure Ltd’s plunge to the lower circuit limit on 6 Feb 2026 underscores the intense selling pressure and negative sentiment surrounding the stock. With a 5.0% daily loss, underperformance against sector and market benchmarks, and a recent downgrade to “Strong Sell,” the stock faces significant headwinds. Reduced delivery volumes and unfilled supply at the lower price band reflect cautious investor participation and panic selling. Until fundamental improvements or positive catalysts emerge, the stock is likely to remain under pressure in the near term.

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