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Stocks of the state-owned oil marketing companies may remain in focus next week after crude prices eased and rupee too recovered significantly over the last four days. The Indian currency has gained 2.7% since Friday, ending at 63.49 to0 a dollar yesterday, while the price of Indian basket of crude dropped to $110.6 a barrel from $112.6 a barrel last Friday. Most market participants believe that these companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd may continue to remain positive in the near term if rupee holds or improves its position. However, the currency is seen volatile next week ahead of the US Federal Reserve's monetary policy meeting on Wednesday where it may take on call on tapering its $85-bln-a-month bond purchase programme. The Reserve Bank of India's stance during the mid-quarter policy review on Friday will also be a key trigger. However, if the market trend weakens and rupee falls from current levels, traders expect stocks of the three companies to come under pressure because of profit booking. The three companies also hiked petrol prices yesterday by around 1.6 rupees a ltr, against expectations of a price cut. This may also give confidence to investors who are increasingly getting worried over the rising revenue losses of these companies. The market was earlier taking heart from reports of a significant one-time
increase in diesel prices, but so far the oil ministry has rejected the possibility. And given elections in some key states in October, the prospects look dim. However, even if the companies are able to carry out the 50-paise-a-month hike in diesel prices in the current scenario, it will be taken as a positive indication. Moreover, diesel demand has remained muted and that would help cap the revenue losses of these companies. Also, the valuations of these companies are still low despite significant gains registered over the past two weeks.
Stocks of the state-owned oil marketing companies may remain in focus next week after crude prices eased and rupee too recovered significantly over the last four days. The Indian currency has gained 2.7% since Friday, ending at 63.49 to0 a dollar yesterday, while the price of Indian basket of crude dropped to $110.6 a barrel from $112.6 a barrel last Friday. Most market participants believe that these companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd may continue to remain positive in the near term if rupee holds or improves its position. However, the currency is seen volatile next week ahead of the US Federal Reserve's monetary policy meeting on Wednesday where it may take on call on tapering its $85-bln-a-month bond purchase programme. The Reserve Bank of India's stance during the mid-quarter policy review on Friday will also be a key trigger. However, if the market trend weakens and rupee falls from current levels, traders expect stocks of the three companies to come under pressure because of profit booking. The three companies also hiked petrol prices yesterday by around 1.6 rupees a ltr, against expectations of a price cut. This may also give confidence to investors who are increasingly getting worried over the rising revenue losses of these companies. The market was earlier taking heart from reports of a significant one-time
increase in diesel prices, but so far the oil ministry has rejected the possibility. And given elections in some key states in October, the prospects look dim. However, even if the companies are able to carry out the 50-paise-a-month hike in diesel prices in the current scenario, it will be taken as a positive indication. Moreover, diesel demand has remained muted and that would help cap the revenue losses of these companies. Also, the valuations of these companies are still low despite significant gains registered over the past two weeks.
