Nifty Oil & Gas falls 1% as oil prices rise; IGL, MGL, BPCL shares drag

The Nifty Oil and Gas declined as much as 1.24 per cent to the day's low of 12,199.20. Out of 15 constituents of the index, 13 stocks declined amid rising crude oil prices

The Nifty Oil and Gas index fell over 1 per cent on Thursday reacting to a rise in crude oil prices amid simmering tensions between the US and Iran.  The Nifty Oil and Gas declined as much as 1.24 per cent to the day's low of 12,199.20.  As of 2:08 PM, the Nifty Oil and Gas index was trading 1.17 per cent down at 12,208.5, as compared to a 0.52 per cent decline in the Nifty 50 index.

 

In the last 12 months, the Nifty Oil and Gas index has risen 21.8 per cent, as against a 12.16 per cent advance in the Nifty 50 index. 

 

 

Out of 15 constituents of the index, 13 stocks were trading low. Among the constituents, Indraprastha Gas, Mahanagar Gas, and Bharat Petroleum Corporation shares declined the most.  Indraprastha Gas fell 4.07 per cent to the 52-week low of ₹169.15 on the National Stock Exchange (NSE). Mahanagar Gas share price decreased 3.23 per cent to ₹1,142 per share. Bharat Petroleum Corporation fell 2.73 per cent to ₹377.    Meanwhile, Oil and Natural Gas Corporation rose 2.1 per cent to a 52-week high of ₹280.30 on the NSE. 

 

Top draggers

Bharat Petroleum Corporation and Reliance Industries were primary detractor of the Nifty Oil and Gas index, dragging the index down by 33.3 and 25.6 points, respectively.  

 

Why did oil and gas stocks fall today?

Oil and gas stocks decline on Thursday as crude oil prices rose for a second session in a row on rising tension between the US and Iran. 

 

Brent crude futures jumped nearly 3 per cent and touched the $70-per-barrel mark briefly on Wednesday. In Thursday’s session, oil futures were quoted at $69.6 per barrel, up 0.3 per cent. 

 

A rise in crude oil prices in the international markets weighs on margins of Indian oil marketing companies (OMCs).

 

On Tuesday, US President Donald Trump said that he was considering to send a second aircraft carrier to the Middle East if a deal is not reached, Reuters reported. 

 

Moreover, after concluding talks with Israeli Prime Minister Benjamin Netanyahu, Trump also said that they did not reach any definitive agreement on how to move forward with Iran, while insisting that the negotiation with Tehran will continue, according to the report.

 

US and Iranian diplomats met last week in Oman. The next whereabouts of the two nations' meeting are yet to be finalised.

 

Additionally, US non-farm payroll data showed that job growth doubled than expected while the unemployment rate declined, indicating the resilience of the economy. This fuelled hopes for healthy demand in the near future.

 

Analyst view 

Brent crude has been hovering in $65 to $70 dollar mark for some time. Any decisive move above $70 could result in fresh traction in refining companies or trigger some profit taking in OMCs, else the mood would largely be neutral, said Ajit Mishra, senior vice president, research, Religare Broking.  "Even a small increase in crude can impact sentiment because OMC profitability is highly sensitive to marketing margins. If crude rises and retail fuel prices remain unchanged, margins can quickly shrink," said Abhinav Tiwari, research analyst at Bonanza Portfolio.

 

The Nifty Oil and Gas Index continues to show resilience on the daily timeframe, trading at 12,225.65 and holding comfortably above both the 50-day and 200-day moving averages. The recent correction found strong support around 11,600–11,800, which aligns closely with the 200-day average, reinforcing this zone as a key demand area, said Vikash Yadav, technical research analyst, Kedia Advisory.

 

As long as the index sustains above 11,800, the broader structure remains constructive. A decisive breakout above 12,450 may trigger fresh buying interest toward higher levels, he added.   

     

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