PSU OMCs decline on gains in Brent oil, weak rupee

Three PSU OMCs fell by 0.71% to 1.62% at 13:00 IST on BSE on worries small gains in Brent oil and weakness in rupee could affect margins as India imports 80% of its oil requirement. .

Meanwhile, the S&P BSE Sensex was down 60.17 points or 0.21% at 27,967.30.

Among PSU OMCs, BPCL (down 0.71%), HPCL (down 1.17%) and Indian Oil Corporation (down 1.62%) declined.

Brent crude held above $78 a barrel on Thursday as the market waited for news on possible cuts in oil output ahead of next week's OPEC meeting. Brent for January settlement was currently up 7 cents at $78.17 a barrel. The contract had lost 37 cents to finish at $78.10 a barrel yesterday, 19 November 2014.

Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In the foreign exchange market, the rupee slumped to its lowest level in nine months today, 20 November 2014, tracking the dollar's strength against major currencies and other Asian peers, while state-owned banks' dollar demand for Iran oil payments also weighed. The partially convertible rupee was hovering at 62.115, compared with its close of 61.96 during the previous trading session. The rupee fell to as low as 62.25 per dollar so far in intraday trade.

Recent decline in crude oil prices has benefited PSU OMCs but fall in rupee against the dollar could erase benefit derived from falling crude to that extent.

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