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PSU OMCs edge higher on slide in crude oil price

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Capital Market
Last Updated : Jan 07 2016 | 12:01 AM IST

Key benchmark indices continued to hover near the flat line in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex was up 7.63 points or 0.03% at 25,587.97. The 50-unit Nifty 50 index was currently up 4.40 points or 0.06% at 7,789.05. The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,754 shares rose and 872 shares declined. A total of 112 shares were unchanged. The BSE Mid-Cap index was currently up 0.4%. The BSE Small-Cap index was currently up 0.65%. Both these indices outperformed the Sensex.

In overseas stock markets, Asian equities edged lower as China continued guiding the yuan lower and after the outcome of a monthly survey pointed to weakness in China's services sector. Yet, stocks in mainland China edged higher on media reports that China will keep in effect a ban on share sales by listed companies' major shareholders until new rules are promulgated. The Shanghai Composite index was currently up 2.2%. Trading in US stock index futures indicated decline for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 131.50 points at the opening bell.

Shares of public sector oil marketing companies (PSU OMCs) edged higher after slide in global crude oil prices yesterday, 5 January 2016. BPCL (up 1.37%), HPCL (up 2.61%) and Indian Oil Corporation (up 2.18%) edged higher.

Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already decontrolled pricing of petrol and diesel.

Shares of oil exploration and production (E&P) companies also gained. Cairn India (up 0.71%) and Oil India (up 1.15%) edged higher. ONGC (down 0.29%) edged lower.

In the global commodities markets, Brent for February settlement was currently up 5 cents at $36.47 a barrel. The contract had lost 80 cents or 2.14% to settle at $36.42 a barrel during the previous trading session amid concerns about an expanding global supply glut.

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In the foreign exchange market, the partially convertible rupee was hovering at 66.76, compared with its close of 66.595 during the previous trading session.

Index heavyweight Reliance Industries (RIL) rose 2.72% at Rs 1,032.45 on reports that a foreign brokerage has maintained conviction buy on the stock. Commercial launch of broadband services from RIL's telecom unit Reliance Jio Infocomm last month could provide a big positive swing for the company going ahead, the brokerage reportedly said.

Index heavyweight and cigarette major ITC was down 1.99% at Rs 318.25. The stock hit a high of Rs 325.90 and a low of Rs 317.80 so far during the day.

Sugar shares rallied. Rana Sugars (up 15.88%), Empee Sugars & Chemicals (up 7.1%), Shree Renuka Sugars (up 5.04%), Dwarikesh Sugar Industries (up 4.65%), Sakthi Sugars (up 3.82%), Dhampur Sugar Mills (up 4.34%), Balrampur Chini Mills (up 3.86%), Oudh Sugar Mills (up 3.96%) and Triveni Engineering & Industries (up 3.24%) edged higher.

Premier Explosives surged 12.73% at Rs 465.90 after the company said it has signed a memorandum of understanding with Israel Aerospace Industries for exploring potential business opportunities. The announcement was made during trading hours today, 6 January 2016.

Shares of Narayana Hrudayalaya surged on its debut. The stock was currently trading at Rs 321.40 on BSE, a premium of 28.56% over the initial public offer (IPO) price of Rs 250 per share. The stock debuted at Rs 291 on BSE, a premium of 16.4% compared with its IPO price. The stock hit a high of Rs 329 and a low of Rs 291 so far during the day. Narayana Hrudayalaya had priced its IPO at the top end of the Rs 245 to Rs 250 per share price band. Headquartered in Bengaluru, Narayana Hrudayalaya operates a chain of 23 hospitals, 8 heart centres and 24 primary care facilities across India.

Meanwhile, the outcome of a monthly survey showed that growth in India's services sector accelerated last month. The Nikkei India Services PMI rose to a 10-month high of 53.6 in December 2015.

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First Published: Jan 06 2016 | 12:19 PM IST

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