PSU OMCs in demand

Shares of three public sector oil companies rose by 1.12% to 2.05% at 12:48 IST on BSE as crude oil prices edged lower.

Among public sector oil companies (PSU OMCs), HPCL (up 2.05%), Indian Oil Corporation (up 1.71%) and BPCL (up 1.12%) edged higher.

The S&P BSE Sensex was down 52.67 points, or 0.19% at 27,908.52.

In global commodities markets, Brent crude oil prices edged lower as the market awaited a nuclear deal between Iran and six global powers that could see an easing of sanctions against Tehran and a gradual increase in its oil exports.

Brent for August settlement was currently off $1.17 a barrel at $56.68 a barrel. The contract had declined 88 cents or 1.49% to settle at $57.85 a barrel during the previous trading session. The August Brent contract is set to expire on 16 July 2015. Brent for September settlement was currently off $1.14 a barrel at $57.01 a barrel.

Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at 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 freed pricing of petrol and diesel.

In the foreign exchange market, the rupee edged higher in volatile trade against the dollar. The partially convertible rupee was currently hovering at 63.5050, compared with its close of 63.515 yesterday, 13 July 2015.

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