CLSA cuts oil stocks, says fuel price rally overdone

Mon Jan 14, 2013 3:51pm IST

An employee fills a vehicle with diesel at a fuel station in New Delhi January 5, 2011. REUTERS/B Mathur/Files

An employee fills a vehicle with diesel at a fuel station in New Delhi January 5, 2011.

Credit: Reuters/B Mathur/Files

Related Topics

Stocks

   

Reuters Market Eye - CLSA downgrades Oil and Natural Gas Corp(ONGC.NS) to "underperform" from "outperform". The brokerage also cuts Indian Oil Corp (IOC.NS) and Hindustan Petroleum Corp (HPCL.NS) to "sell" from "underperform".

CLSA says the rally in these state-owned stocks on the back of hopes for a hike in fuel prices is overdone, given any "sweeping" changes to pricing would be hard to implement in a "very busy" political calendar in 2013.

The brokerage adds Indian Oil and HPCL could see higher under-recoveries from a weaker rupee, while ONGC could see the government limit its subsidy burden in 2013.

Stocks later recorvered. IOC ended up 1.18 percent, HPCL gained 1.2 percent, while ONGC rose 4.41 percent.

(Reporting by Abhishek Vishnoi)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage