Stocks of oil marketing companies faced an unexpected decline on Friday after fuel prices were hiked by Rs 3 per litre.
While the hike will trim losses for oil marketing companies, investor sentiment remained weak as a steeper rise was expected.
This resulted in a decline of up to 3.2 percent in the stocks of oil marketing companies.
The stock of Indian Oil, the country’s biggest OMC, declined by as much as 2 percent to Rs 137.40 in early trade. The decline came after the stock opened nearly 1 percent higher at Rs 141.65 compared to the previous close of Rs 140.25 apiece.
Similarly, the stock of Bharat Petroleum also opened marginally higher at Rs 295.85 apiece. However, it declined to Rs 286.20, marking a loss of 3.2 percent compared to the previous close of Rs 295.10 apiece.
The stock of Hindustan Petroleum faced a similar trend, declining 0.16 percent from the opening price of Rs 376.50 compared to the previous close of Rs 377.10 apiece. The stock further declined to Rs 366.15 apiece, recording a loss of 3 percent.
The stock of Reliance Industries also traded in the red on the bourses, declining by up to 1.8 percent to Rs 1,338 compared to the previous closing price of Rs 1,361.75. The stock had opened 0.23 percent higher.
The sell-off in oil marketing company stocks came even after they announced a hike of Rs 3 per litre in petrol and diesel prices.
Days earlier, Oil Minister Hardeep Singh Puri had said that state-owned oil companies were facing losses of Rs 1,000 crore every day to keep fuel prices stable.
A price increase was widely expected as crude oil prices have jumped more than 60 percent to reach $107 per barrel since the beginning of the West Asia crisis in late February.
