Sensex, Nifty Fall As Oil & Gas Stocks Slump
BSE Sensex and Nifty struggled today weighed down by sharp losses in oil & gas stocks after the government deferred decision on gas price hike for three months.
ONGC slumped over 6 per cent while Reliance Industries fell over 3 per cent. Oil marketing companies BPCL, HPCL and Indian Oil fell between 2-3 per cent as the government clarified that currently there is not proposal to hike LPG and kerosene prices.
However, analysts say the deferment of gas price hike is near-term negative but it does not change the direction of structural reforms in the oil and gas sector.
Mehraboon Irani, principal and head of private client group business at Nirmal Bang Securities, said investors could use the declines to accumulate ONGC, Oil India and Reliance Industries. Markets are likely to give time for the new government and we should not expect big changes overnight, he added.
Some gains were seen in auto stocks with Bajaj Auto, Tata Motors and Hero MotoCorp nearly up 1 per cent. The excise duty sops offered in the February interim budget was yesterday extended by six months.
At 12: 45 p.m., the Sensex was down 134 points to 25,179 while Nifty slipped 40 points to 7,528. At its day’s low, Nifty fell to 7,514. Market analyst Saumil Trivedi said if Nifty falls below 7500 markets could see more correction.
Elsewhere, most of the other Asian markets were higher on Thursday as weak US growth seemed to further delay the day when interest rates might rise, pulling down bond yields globally and pushing investors toward riskier assets in a desperate search for returns.