OMCs recover after two-day sell-off; HPCL jumps 6%, IOCL, Gail gain 4% each

Shares of oil & gas and state-run oil marketing companies (OMCs) rose in the early morning deals on Monday, after witnessing heavy sell-off in the last two trading sessions.

At 09:52 am, Hindustan Petroleum Corporation (HPCL) was trading nearly six and a half per cent higher at Rs 176 a piece on BSE while Bharat Petroleum Corporation (BPCL) was trading at Rs 274, up 3.32 per cent. Shares of IndianOil was trading over 4 per cent higher at Rs 123.05.

Investor confidence in public sector oil and gas companies and OMCs took a massive hit last week after the government announced cut in excise duties in petrol and diesel prices by Rs 2.50 per litre and asked the refiners to absorb a Re 1 per litre cut in excise duty on petrol and diesel.

After the announcement, global brokerages such as Goldman Sachs and Citigroup Global Markets downgraded the stocks saying the imposition of price controls was an 'unequivocal negative' that underscores 'high political risk' associated with state-owned enterprises.

OMCs, aviation stks drop as crude rises; IndiGo, Jet Airways hit 52-wk lows

Shares of aviation and oil and gas companies came under selling pressure on Tuesday as the crude oil prices hit a four-year high.

State-run GAIL was trading over 4 per cent lower at Rs 365.65 apiece on BSE, after hitting an intraday low of Rs 364.90. BPCL was down nearly 3 per cent at Rs 357.40.

Shares of Hindustan Petroleum (HPCL) was trading two and a half per cent lower at Rs 242 while those of Indian Oil was down 1 per cent at Rs 153.5. Oil India was trading at Rs 217, down 0.37 per cent.

At the time of writing this report, the S&P BSE Oil & Gas index was down 1 per cent at 14,762.

In the aviation space, all the three stocks - SpiceJet, IndiGo and Jet Airways, hit their respective 52-week lows.

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OMCs under pressure; IOC hits 52-week low; HPCL, BPCL down 6%

Shares of oil marketing companies (OMCs) were under pressure with the Indian Oil Corporation (IOC) hitting its 52-week low, while Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) falling 6% each on the market on reports that the government may ask these companies to freeze prices as a temporary arrangement.
IOC slipped 5% to Rs 154, its fresh 52-week low on the BSE, while HPCL plunged 6.4% to Rs 292 and BPCL shed 6% to Rs 373 on the BSE in intra-day trade. On comparison, the S&P BSE Sensex was trading 0.19% lower at 34,586 points at 10:48 am.

Oil and Natural Gas Corporation (down 2% at Rs 180) and Oil India (down 1.5% at Rs 235) were too trading lower by more than 1% on the BSE.

“Petroleum Minister Dharmendra Pradhan is expected to meet OMCs on Wednesday to take stock of the situation. It is likely that the government may ask IOC, HPCL and BPCL to freeze prices as a temporary arrangement,” the Business Standard reported