In an otherwise dull and subdued scenario on the bourses on Thursday, petroleum and refineries sector stocks seemed to be gushing to new heights, surging the range of 10% to 30%.
Market experts feel that easing of crude prices lowered fears of a total wipe out of earnings for oil marketing companies, as crude oil prices had begun challenging the $100 bbl mark last week. Petroleum sector companies, especially the refining and marketing company share prices, had been battered severely and valuations looked compelling for fresh investments. Refiners and marketers feature amongst the leading gainers.
Bongaingaon Refineries gained 30.13% to close at Rs 104.95, Mangalore Refineries was close on the heels with a 22.09% closing at Rs 127.95, Manali Petroleum (20% at Rs 21.42) and BPCL (18.02% at Rs 427).
SP Tulsian, investment consultant, said, ?Refinery stocks went higher mainly because of the compelling valuation call of these companies. Because of the rise in crude oil prices gross refining margins has shot up in recent times attracting investors interest.? Another dealer with a domestic brokerage firm said that certain sections of the market participants are expecting a hike in the prices of fuel, which is also aiding the current rally in the refinery stocks. News of the government might issue Rs 30,000 crore worth oil bonds and relieved some pressure, also added to the cheer.
Essar Oil rose by Rs 36.85 or 30.50% to close at Rs 157.65 after the companies’ announcement that its board meeting to be held on November 16 may consider further issue of securities or warrants on a preferential basis to the promoters. On Thursday, weak Asian cues prompted investors back home to book profits on the frontline counters that saw the 30-share Sensex of the Bombay Stock Exchange (BSE) closing the day at 19,784.89 points shedding 144.17 points or 0.72%. On the other hand the broader S&P CNX Nifty of the National Stock Exchange (NSE) closed the day at 5,912.10 points losing 25.8 points or 0.43%.
