State-owned oil companies gain on diesel price hike hopes

Reuters Market Eye - Shares in state-owned oil companies gain on hopes that the government will do a one-time hike in diesel prices after Indian parliament's extended monsoon session ends on Saturday, multiple dealers said.

Oil and Natural Gas Corporation Ltd gains 5.3 percent, while among oil marketing companies Bharat Petroleum Corporation Ltd rises 2.7 percent and Hindustan Petroleum Corporation Ltd is up 2.2 percent. Indian Oil Corporation Ltd also gains 0.6 percent.

Analysts say higher diesel prices could lower retail fuel under-recoveries and could lift ONGC's earnings estimates for FY14.

(Reporting by Abhishek Vishnoi)