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The rupee-dollar movement will continue to play a key role in deciding the direction for shares of state-owned oil marketing companies next week while crude prices will also be monitored closely. The sharp depreciation of the rupee has been a key overhang on the stocks of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan PetroleumCorp Ltd. The sharp spike in crude prices following geopolitical tensions in Syria had added to their troubles. The Indian basket of crude soared to $114 a barrel this week, almost $5 more than the previous week. The Indian currency recovered significantly in the latter half of the current week ending at 65.70 to a dollar, after having fallen to as low as 68.80 on Wednesday. The revenue losses of the oil marketing companies have surged because of the rupee decline. On the positive side, valuations of the shares of these companies are near their all time low. While concerns remain, the low valuations may support the stocks and if the rupee holds on, the stocks may witness renewed buying activity. Meanwhile, private sector companies such as Reliance Industries and Cairn India are likely to benefit from the current scenario as a weaker rupee improves their realizations on gas, crude and oil products sales. Shares of Reliance Industries are seen in an uptrend next week also aided by positive news flow on the upstream business. The company got the approval of oil ministry this week for a $3.2 bln development programme in the R-series fields of KG-D6. The development programme is expected to lead to a significant increase in gas production from the block in the next 3-4 years. Reliance
The rupee-dollar movement will continue to play a key role in deciding the direction for shares of state-owned oil marketing companies next week while crude prices will also be monitored closely. The sharp depreciation of the rupee has been a key overhang on the stocks of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan PetroleumCorp Ltd. The sharp spike in crude prices following geopolitical tensions in Syria had added to their troubles. The Indian basket of crude soared to $114 a barrel this week, almost $5 more than the previous week. The Indian currency recovered significantly in the latter half of the current week ending at 65.70 to a dollar, after having fallen to as low as 68.80 on Wednesday. The revenue losses of the oil marketing companies have surged because of the rupee decline. On the positive side, valuations of the shares of these companies are near their all time low. While concerns remain, the low valuations may support the stocks and if the rupee holds on, the stocks may witness renewed buying activity. Meanwhile, private sector companies such as Reliance Industries and Cairn India are likely to benefit from the current scenario as a weaker rupee improves their realizations on gas, crude and oil products sales. Shares of Reliance Industries are seen in an uptrend next week also aided by positive news flow on the upstream business. The company got the approval of oil ministry this week for a $3.2 bln development programme in the R-series fields of KG-D6. The development programme is expected to lead to a significant increase in gas production from the block in the next 3-4 years. Reliance
