Sensex dragged lower by state-run oil companies, Iraq

Reuters Market Eye - The BSE Sensex is down 0.53 percent while the Nifty is 0.51 percent lower, led by losses in state-run oil companies after a newspaper report suggested higher gas pricing may be allowed only for incremental output.

Traders say concerns over ongoing violence in Iraq also hurting sentiment for risk. However, sharp losses are unlikely as fundamentals for India haven't changed much.

The BSE oil and gas index <.BSEOIL> trading down 3.4 percent with Bharat Petroleum Corp Ltd. down 3.9 percent, Oil and Natural Gas Corp Ltd. down 6.6 percent and Oil India down 5.3 percent.

The petroleum ministry has proposed that higher gas price as per the Rangarajan formula could be allowed only for incremental production over and above the current levels, as an alternative to applying the formula unconditionally from July 1, a report in Financial Express said on Thursday.

 

Shares of companies in which the government might go for divestment also fell. Coal India down 2.5 percent, National Aluminium Co. Ltd. down 2.9 percent.

(Reporting by Swati Bhat)