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Shares of state-owned oil marketing companies as well as upstream companies are seen range bound next week but the broad market trend will be a key factor. Rupee-dollar movement as well as crude oil prices will continue to be the drivers of shares of the three public sector refiners, Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd. While crude oil prices softened this week, the rupee reversed trend and slid from near 61 for a dollar mark early in the week to end at 62.12 per dollar. The oil minister's announcement that the government is looking to partially roll back the decontrol of pricing of bulk diesel sales would also weigh on the shares. The stock markets as well as the rupee are seen choppy next week ahead of the Reserve Bank of India's mid-quarter policy review Wednesday. Despite its recent strengthening, the rupee remains prone to multiple unpredictable macroeconomic factors, India Ratings said in a report recently adding that chance of a badly-needed steep hike in diesel price is very low. On the other hand, rising revenue losses of the oil marketing companies and pressure to keep the fiscal deficit under control, may force the government to increase the burden on the upstream companies. The fears of a further rise in subsidy burden in 2013-14 (Apr-Mar) will continue to weigh on the shares of Oil and Natural Gas Corp Ltd and Oil India Ltd. Reliance Industries is unlikely to gain much from current levels until the government announces a decision on implementing the new gas price formula for the company's KGD6
Shares of state-owned oil marketing companies as well as upstream companies are seen range bound next week but the broad market trend will be a key factor. Rupee-dollar movement as well as crude oil prices will continue to be the drivers of shares of the three public sector refiners, Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd. While crude oil prices softened this week, the rupee reversed trend and slid from near 61 for a dollar mark early in the week to end at 62.12 per dollar. The oil minister's announcement that the government is looking to partially roll back the decontrol of pricing of bulk diesel sales would also weigh on the shares. The stock markets as well as the rupee are seen choppy next week ahead of the Reserve Bank of India's mid-quarter policy review Wednesday. Despite its recent strengthening, the rupee remains prone to multiple unpredictable macroeconomic factors, India Ratings said in a report recently adding that chance of a badly-needed steep hike in diesel price is very low. On the other hand, rising revenue losses of the oil marketing companies and pressure to keep the fiscal deficit under control, may force the government to increase the burden on the upstream companies. The fears of a further rise in subsidy burden in 2013-14 (Apr-Mar) will continue to weigh on the shares of Oil and Natural Gas Corp Ltd and Oil India Ltd. Reliance Industries is unlikely to gain much from current levels until the government announces a decision on implementing the new gas price formula for the company's KGD6
