Shares of all oil and gas and energy companies were in the red on Thursday amid a global sell-off triggered by Russia’s invasion of Ukraine. Following the development of the war, global benchmark Brent crude rose above $104 a barrel, its highest level since August 2014.
The sectoral gauge Nifty Oil and Gas slipped more than 4.5 percent in intraday trade pulling the benchmarks indices down. Sensex nosedived 2,700 points at the close and Nifty50 cracked below 16,300 after Russian President Vladimir Putin announced a military operation in Ukraine.
The stocks in the Nifty Oil and Gas pack plunged 2 to 10 percent. A total of 7,82,13,715 shares of Nifty Metal constituents worth Rs 3.41 lakh changed hands, NSE data showed.
Shares of state-run GAIL (India) dropped nearly 7 percent at day’s low and ended the session 6.37 percent lower at 129.45 on NSE.
Mangalore Refinery and Petrochemicals Limited (MRPL), the worst performer at the time of writing, decline more than 11 percent to intraday trade. The stock settled at Rs 37.45, down 10.30 percent from its previous close, at 3:10 pm.
Indraprastha Gas shares corrected more than 8 percent during the day and recovered marginally in afternoon deals to finish at Rs 333.05, 7.77 percent lower from its previous close. Shares of Mahanagar Gas Limited (MGL) too fell almost 9 percent in intraday trade. The stock was down 8.53 percent at Rs 684 at the close.
Oil and Natural Gas Corporation Limited (ONGC) shares plunged almost 3 percent during the session and ended 2.77 percent lower at Rs 156.30 on NSE.
|INDEX||CHANGE AT CLOSE|
|Adani Total Gas||-4.37%|
|Bharat Petroleum Corporation||-6.62%|
|Gujarat State Petronet||-7.83%|
|Gujarat Gas Limited||-8.67%|
|Hindustan Petroleum Corporation||-5.84%|
|Indian Oil Corporation||-5.98%|
|Mahanagar Gas Limited||-8.53%|
|Mangalore Refinery and Petrochemicals||-10.30%|
|Oil India Limited||-1.09%|
|Oil and Natural Gas Corporation||-2.77%|
According to Norbert Rücker, Head of Economics and Next Generation Research, Julius Baer, the Ukraine crisis has brought the economy and markets to the brink of a worst-case scenario, where the crisis begins to turn into an economic shock, not only a sentiment shock.
“Center stage of such an outcome are energy markets, where oil and natural gas prices have become the crisis’ fear barometer. Any disruption of flows between Russia and Europe, due to damage or sanctions, would drastically add to the already present supply scarcity,” he told CNBCTV18.com.
Nirav Karkera, Head of Research, Fisdom, said the ongoing geopolitical upheaval coincides with the F&O expiry, which has only added to the frenzy on D-Street. He expressed concern over India VIX that went up 30.31 percent today to 31.98, floating at levels unseen in almost 20 months, which signals heightened volatility.
The next leg of investors’ reactions will be decided based on how does the US and NATO decide to react, he said, adding that while sanctions are going to be bad, military intervention would be worse for global economics.
“There’s a slim chance that the next episode would be of de-escalation and diffusion of the tension basis amicable diplomacy. The bad news is that things could probably get worse before it gets better, but the good news is that now would be a good time to revisit high-conviction ideas and also build positions if the fundamentals seem relatively insulated against the crisis,” he told CNBCTV18.com.
Meanwhile, Ajit Misha, VP- Research, Religare Broking, said, the exploration and refining companies would do well due to the sharp rise in oil prices. However, the brokerage firm is not that optimistic about OMCs as petrol and diesel prices have not been hiked over the last 2-3 months. Moreover, it is unlikely that the entire hike would be passed on as it would be lead to a spike in inflation, Misha added.
First Published: IST