Oil Stocks Outlook for the week - 05 to 09.May.2014
Stocks
of the state-owned oil refining and marketing firms as well as private sector
companies
such as Reliance Industries Ltd are seen range bound next week with a
positive
bias as elections near end.
The
three oil marketing companies -- Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd
and
Hindustan Petroleum Corp Ltd -- haven't increased diesel prices because of the
ongoing
elections. It is expected that these companies may announce a hike of 50 paisa
or
even
a rupee in May, after elections are over.
The
increase in diesel price will be sentimentally positive for the three stocks.
Though it
is
unlikely to be announced next week, expectations of a hike will provide support
on
downside.
The
intra-week movement will continue to take cues from rupee-dollar movement. The
Indian
currency has gained some lost ground this week and ended close to the
60-for-adollar
mark.
Further appreciation will help HPCL, IOC and BPCL stocks gain.
Also
broad market trend will be a key. Most expect benchmark indices to trade in a
range
next
week but volatility may increase as market participants prepare themselves for
May
16,
when outcome for the general elections will be announced.
End
of elections are also likely to have a bearing on the stock of Reliance
Industries Ltd
as
Oil Minister Veerappa Moily said this week that the new gas price -- almost
double the
existing
$4.2 per but -- will be notified immediately after the last phase of polling on
May
12.
There is, however, still a lot of uncertainty on the gas price as there are
several cases
pending
in court and several parties have come out openly against the move. The stock
will
continue to move in tandem with news flow on the gas price issue as well as the
broad
market trend.
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