PSU OMCs decline on rebound in crude oil prices

Three public sector oil marketing companies lost 1.23% to 1.84% at 15:14 IST on BSE on rebound in crude oil prices.

Indian Oil Corporation (down 1.45% at Rs 417.25) and HPCL (down 1.23% at Rs 921) edged lower.

Meanwhile, the S&P BSE Sensex was down 58.13 points or 0.22% at 26,784.90.

In global commodities markets, Brent crude oil futures edged higher on renewed hope for more cohesion within the Organization of the Petroleum Exporting Countries (OPEC) to contain supply glut. Brent for August settlement was currently up 54 cents at $50.18 a barrel. The contract had declined 40 cents or 0.79% to settle at $49.64 a barrel during the previous trading session.

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. However, a recovery in the rupee against the dollar eases concerns about higher crude import costs. Gains in local currency will reduce the cost of imports.

In the foreign exchange market, the rupee strengthened past 67 against the dollar. The partially convertible rupee was hovering at 66.97, compared with closing of 67.26 during the previous trading session.

BPCL fell 1.84% at Rs 994.25 as the stock turned ex-dividend for final dividend of Rs 15 per share for the year ended 31 March 2016. Before turning ex-dividend, the BPCL stock offered a dividend yield of 1.48% based on the stock's closing price of Rs 1,012.85 on the BSE on Friday, 3 June 2016.

Shares of BPCL are currently trading cum bonus. The company had recommended a 1:1 bonus issue on 26 May 2016. The stock will go ex-bonus on 13 July 2016. BPCL has fixed 14 July 2016 as the record date for the bonus issue.

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