BackOMCs, airlines extend gains as crude oil prices fall
HPCL surged over 10%, BPCL 7%, while Jet Airways climbs over 12% and SpiceJet 7%
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Mumbai: Shares of oil marketing companies (OMCs) and airlines were trading higher for the second day after brent crude prices fell to a four-year low of $72.3 per barrel.
Hindustan Petroleum Corp. Ltd (HPCL) surged 10.24% to ₹ 603.95, Bharat Petroleum Corp. Ltd (BPCL) rose 6.9% to ₹ 769.45, Indian Oil Corp. Ltd 5.7% to ₹ 369.30, Castrol India Ltd 3.4% to ₹ 499.25 and Mangalore Refinery and Petrochemicals Ltd 6% to ₹ 54.75. The BSE oil and gas index rose 1% to 10,980.45 points.
Lower crude oil prices will bring down under-recoveries for state-owned oil firms which sell LPG and kerosene at government-determined prices.
Aviation shares were also trading higher as falling crude prices may lead to another cut in jet fuel prices. Since August, the government has cut jet fuel prices four times. Jet fuel constitutes more than 40% of an airline’s operating costs.
Separately, India’s second-largest airline by passengers carried, Jet Airways (India) Ltd rose as much as 12.8% to ₹ 305.40 per share. Credit rating agency Icra Ltd on Thursday upgraded Jet Airways’s rating to BB from ‘C’, which means that company is seen to be at a lower risk of defaulting on its loan payments.
Shares of SpiceJet Ltd also rose as much as 7.1% to ₹ 16.50.
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