Equity Alert: Oil retailers up over 5% on weak oil prices
MUMBAI--12:33PM--Shares of oil retailing companies surged over 5%
in a
weak broad market as crude oil fell below $92 a barrel on New York
Mercantile
Exchange, dealers said.
Crude oil was trading at $91.97 a barrel on NYMEX today.
Analysts said depreciating rupee against dollar will offset
benefits of
fall in crude oil prices.
Indian rupee is currently trading at 46.63 per $1, its lowest in
2008.
"The uncertainty still prevails. With crude prices falling, and
inflation
cooling down, government may consider cutting domestic fuel prices,
which
might also put pressure on state-run oil retailers," Vinay Nair,
analyst at
Khandwala Securities said.
However, downside may be limited, as fall in crude oil prices
below $100
is a major positive for these companies and rupee is likely to stay at
current levels and may not weaken further, Nair said.
"But upside is also limited as broad market sentiment is likely to
be
weak. It is better to hold the stocks now," he said.
Hindustan Petroleum and Bharat Petroleum surged over 5% to 252
rupees and
371 rupees, respectively, and Indian Oil Corp advanced over 3% to 429
rupees.
"I would recommend investors to stay cautious and book profits at
every
rise. The rally may not sustain, as (Indian) rupee is looking weak
against
dollar," a senior dealer at a domestic brokerage house said.
He pegged intraday resistance for Bharat Petroleum at around 380
rupees.
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