Oil stocks gain as crude prices ease; Reliance jumps 3%
What's the story
Shares of Oil Marketing Companies (OMCs) and other oil & gas stocks surged by up to 3.5% in Friday's trade. The rally was driven by easing crude oil prices and a broader market rebound. At the time of writing, the Sensex was trading over 950 points higher at 75,164 while Nifty gained over 300 points or 1.3% to cross the key level of 23,300 with market breadth remaining strong with advances leading declines.
Index performance
IOCL, BPCL and HPCL lead gains
The Nifty Oil & Gas index outperformed the broader market rally, rising by some 1.6%. Meanwhile, the Nifty Energy index gained nearly 2%, showing strength across upstream, downstream and gas-linked companies. Hindustan Petroleum Corporation (HPCL) shares rose over 3.4%, making it a top gainer in the oil & gas sector. Indian Oil Corporation (IOC) stock gained around 2.5% while Bharat Petroleum Corporation (BPCL) advanced about 1%.
Market movers
Reliance jumps over 3% on broader market recovery
Reliance Industries' shares jumped over 3.2%, giving a major boost to the sectoral index. Other oil & gas stocks also traded higher with Indraprastha Gas (IGL) rising over 1.6% and GAIL gaining around 0.8%. Upstream players ONGC and Oil India saw modest gains amid the rally in OMC stocks as crude oil prices cooled to around $105 per barrel from recent highs near $119 due to global efforts to stabilize supply routes amid geopolitical tensions in the Middle East.
Profit outlook
Broader market rebounds after Thursday's sharp sell-off
Lower crude prices usually support OMC margins by reducing input costs, which in turn improves the profitability outlook for refiners. The broader recovery in oil & gas stocks also reflects improving risk sentiment after Thursday's sharp market sell-off. The rally was broad-based with gains seen in metals, IT, banks and infrastructure stocks indicating a risk-on move across the market despite volatility cooling with India VIX easing about 3% today but still remaining elevated due to geopolitical developments.