Stocks of the oil&gas sector rose by more than 1% on Monday, outperforming the benchmark indices, as the price of Brent crude fell by more than $2 per barrel. Oil prices fell as Iran and the world powers signed a landmark nuclear deal over the weekend. The BSE oil&gas sector index was up 1.4%.
Analysts said that the drop in oil prices would help in bringing down the current account deficit and also help in keeping inflation under control.
The rise in oil stocks was led by BPCL, which was up 4.5%, followed by Reliance Industries which was up 2.8%. Indian Oil was up 2.7%.
The deal gains significance in light of the fact that sanctions imposed on trade with Iran could be lifted leading to higher crude oil supplies. World powers had been concerned about the proliferation of Iran’s nuclear programme and considered it a threat to peace in the West Asian region.
According to the deal, Iran has agreed to accept certain restrictions on its nuclear programme in exchange for partial relief from sanctions. The signing of the deal marks the end of a ten-year old impasse over Iran’s nuclear programme.
Union minister for petroleum and natural gas, M Veerappa Moily is also expected to meet domestic fund managers and sector analysts here today as part of the road-show for the Indian Oil Corporation's divestment programme. This is the first time a minister is meeting with domestic investors as part of its promotion of divestment programme, market participants said.
However, some sections of the market believe that poor foreign investor interest in the divestment programme was the compelling factor behind the meeting.
