www.rupeedesk.in
Stocks of state-owned oil marketing companies are seen rangebound with a positive bias next week as the focus will be on companies announcing Oct-Dec earnings as well as rate sensitive stocks ahead of Reserve Bank of India's quarterly monetary policy review. Shares of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd pared some gains this week after surging 11-23% in the previous one as most investors booked profits.
Next week the trend is seen positive. With diesel prices now expected to be revised regularly, the stance on these stocks is broadly positive. The government had last week allowed these companies to effect a gradual increase in diesel prices in order to align them with global rates. The rupee-dollar movement too has been favourable for the oil refiners over the past few days with the rupee appreciating close to 2% since mid-January and stabilising around 53.7 to a dollar. However, a likely weakness in the market next week may cap gains in these shares.
Shares of Oil and Natural Gas Corp Ltd and Oil India Ltd too are seen positive in the near term, though the extent of gains will depend on the market movement. The petroleum ministry has sought the Union Cabinet's approval for hike in price of gas sold through the administered price mechanism.
The Cabinet note proposes the approval of a gas price formula based on the proposals of the Rangarajan committee, which may lead to gas price of $8 per mmbtu from $4.2 now.
Shares of Reliance Industries too are expected to remain upbeat after it reported significant uptrend in the refining space in Oct-Dec despite a weak global refining market. Refining continues to be biggest driver of the company's earnings accounting for almost 80% of its revenues. The company's refining margin in Oct-Dec was $9.6 a barrel, higher than the widely expected $8.5-$9.0 a barrel.
