The Hindu Business Line : Petro price cut: Oil counters turn negative

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Kolkata Feb 15 Negative sentiment generally prevailed in the oil marketing counters on Thursday in the backdrop of the official announcement on petrol and diesel price cuts (Rs 2 per litre for petrol and Re 1 for diesel effective from midnight).

"The immediate market reactions are based on anticipated revenue loss and reduction in profitability," said Mr Rohit Nagraj, an analyst with Angel Broking. Ms Shahina Mukadam, head of research, IDBI Securities, also echoed the same opinion.

HPCL closed down 1.07 per cent and IOC by 1.52 per cent. However, BPCL finished in the green by 0.59 per cent.

Market sources said the BPCL gain could be attributed partially to short covering. Some industry analysts also felt that compared to other marketing companies, BPCL crude trading was better managed. Variations in the closing price could also be linked to this factor.

Though the short-term view on the counter appeared negative, analysts seem to hold divergent views on the outlook of these stocks in the medium to long-term.

According to Mr Gul Tekchandani, investment strategist, in the medium to long-term perspective, the outlook for the stocks in the oil sector remains unchanged and the current dips could provide opportunity for purchases for some long-term investors.