PSU OMCs gain on reports a foreign brokerage maintains outperform rating

Shares of three public sector oil marketing companies rose 1.51% to 2.55% at 14:38 IST on BSE on media reports that a foreign brokerage has maintained its outperform rating on these fuel retailers.

BPCL (up 1.51% at Rs 814.95), HPCL (up 2.55% at Rs 740.50) and Indian Oil Corporation (up 1.86% at Rs 392) edged higher.

Meanwhile, the S&P BSE Sensex was down 241.74 points or 0.97% at 24,562.64.

The foreign brokerage reportedly said that the refining margins are expected to remain strong for oil retailers as demand-supply tightens.

Meanwhile, in the global commodities markets, Brent for May settlement was currently down 97 cents at $38.56 a barrel. The contract had declined 86 cents or 2.12% to settle at $39.53 a barrel during the previous trading session.

Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already decontrolled pricing of petrol and diesel.

In the foreign exchange market, the partially convertible rupee was hovering at 67.295, compared with closing of 67.105 during the previous trading session.

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