Sensex ends 155 points lower on rate hike fears; oil & gas up
25 Jun 2010
The benchmark Nifty closed Friday's session sharply lower, dragged especially by financials on fears of likely rate hike. Technology, metal, FMCG, realty, capital goods and select auto companies' shares also witnessed selling pressure. Weak global cues weighed on equity benchmarks as well.
On the other side, shares of oil & gas companies led the support to markets post EGoM approved market driven increase in petrol prices. Select telecom and power stocks also gained.
After more than two weeks, finally the government has decided to free petrololuem products from its clutch which will be now driven by the market rates. However it has hiked diesel and cooking fuels price from midnight, as the Empowered Group of Ministers (EGoM) has given a nod to the price-hike.
Following the price-hike, petrol will get costly by Rs 3.50 per litre, diesel by Rs 2 per litre, kerosene by Rs 3 per litre while LPG will be hiked to Rs 35 per cylinder. The oil ministry has said that no decision has been taken in duty on oil products.
All oil & gas companies' shares reacted positively and remained the most active on exchanges; HPCL, IOC and BPCL rallied 10.4-13.7%, which will benefit the most. ONGC and Essar Oil surged over 6%. Initially GAIL also shot up 7% but due to lack of clarity on subsidy sharing formula, the stock came off its highs and closed 1.6% higher. The BSE Oil & Gas Index rose 2.88%.
Another news was that Reliance Industries and Reliance Natural Resource (RNRL) have signed a revised gas supply master arrangement (GSMA). It is learnt that RNRL will approach the government for the expeditious gas allocation.
