MUMBAI: Shares of state-run oil companies advanced by up to 6 per cent on the BSE today after the government announced a hike in fuel prices in order to ease pressure on their margins.
Hindustan Petroleum Corp Ltd (HPCL) gained 5.80 per cent to close at Rs 415.25 on the Bombay Stock Exchange (BSE). In intra-day, the scrip accelerated by 6.87 per cent to hit a month's high of Rs 419.50.
Similarly, Bharat Petroleum Corporation Ltd (BPCL) settled 4.62 per cent up at Rs 663.70. In intra-day, the stock gained 8.29 per cent to touch a month's high of Rs 687.
According to media reports, Bank of America Merrill Lynch has raised its target price on state-run oil marketing companies. BofA raised its target price on HPCL to Rs 500 from Rs 441 and on Oil India to Rs 1,756 from Rs 1,583, while keeping its 'buy' rating on both stocks.
BPCL's target price was raised to Rs 739 from Rs 650 and BofA kept a "neutral" rating on the stock, it added.
Indian Oil Corp too saw brisk buying at its counter as the stock surged by 3.10 per cent to settle at Rs 347.55.
Flagship exploration firm Oil & Natural Gas Corp's shares rose by 4.16 per cent to end at Rs 284.15, while Oil India's shares went up 5.64 per cent and GAIL (India) 1.83 per cent.
Led by gains in these stocks, the BSE Oil & Gas index finished the day at 9,170.38, up 1.40 per cent from the previous close.
The government on Friday increased diesel price by Rs 3 per litre, domestic LPG by Rs 50 per cylinder and kerosene by Rs 2 per litre, which would help the oil companies reduce their revenue loss by Rs 21,000 crore.
Meanwhile, the BSE benchmark Sensex ended the day at 18,412.41, up 171.73 points, or 0.94 per cent.
