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Stocks of state-owned oil marketing companies are seen opening positive next week after another round of 50 paise hike in diesel prices after market hours yesterday. However, the gains would be capped at 2-3% through the week but not much downside is seen from current levels in the near term as rupee continues to move in a tight range and crude oil prices have stabilised as well.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp hiked diesel prices by 50 paise a litre yesterday and petrol prices by 60 paise a litre. The diesel price hike was unexpected as general elections are approaching and the market believes that the government would put a stop to the unpopular move sooner or later. These companies are still losing around 8.37 rupees per litre on sale of subsidised diesel. The move is also likely to help stocks of Oil and Natural Gas Corp and Oil India which generally benefit from every price hike as it reduces their subsidy burden.
However, Reliance Industries is likely to remain under pressure in the near term after the Aam Aadmi Party levelled some serious allegations against the company on routing money through illegal channels. The company has refuted all allegations of money laundering and manipulating the government to get higher gas prices, but sentiment would remain negative towards the stock. The stock closed below the 800-rupee mark for the first time yesterday in over six months. It could see further downside as the political slugfest over the company worsens ahead of elections.
Stocks of state-owned oil marketing companies are seen opening positive next week after another round of 50 paise hike in diesel prices after market hours yesterday. However, the gains would be capped at 2-3% through the week but not much downside is seen from current levels in the near term as rupee continues to move in a tight range and crude oil prices have stabilised as well.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp hiked diesel prices by 50 paise a litre yesterday and petrol prices by 60 paise a litre. The diesel price hike was unexpected as general elections are approaching and the market believes that the government would put a stop to the unpopular move sooner or later. These companies are still losing around 8.37 rupees per litre on sale of subsidised diesel. The move is also likely to help stocks of Oil and Natural Gas Corp and Oil India which generally benefit from every price hike as it reduces their subsidy burden.
However, Reliance Industries is likely to remain under pressure in the near term after the Aam Aadmi Party levelled some serious allegations against the company on routing money through illegal channels. The company has refuted all allegations of money laundering and manipulating the government to get higher gas prices, but sentiment would remain negative towards the stock. The stock closed below the 800-rupee mark for the first time yesterday in over six months. It could see further downside as the political slugfest over the company worsens ahead of elections.
