The partial decontrol of diesel prices triggered a rally in stocks of oil and gas sector on Friday, which resulted in the Bombay Stock Exchange benchmark index, Sensex, closing above the 20,000-mark .

With FIIs pumping in around Rs. 90 billion this calendar year so far, the sentiments on bourses are upbeat. Markets have moved up in anticipation of fund flows, which was expected with global liquidity easing. Moreover, the initiatives of the Government to revive the economy also have received the attention of foreign funds.

The 30-share index closed at 20039.04 up by 75.01 points. On the National Stock Exchange, the Nifty index closed at 6064.40 with a gain of 25.20 points.

Rally in oil & gas stocks

The rally was led by BSE’s oil and gas stocks, which gained 3.09 per cent, followed by PSUs 2.77 per cent, power 1.44 per cent, realty 0.86 per cent, capital goods 0.21 per cent, banks 0.14 per cent and FMCG 0.03 per cent.

However, stocks of information technology, automobile, metal, and healthcare ended in the red. Among the broad-based indices, BSE 100 gained 0.29 per cent. BSE 200 was up by 0.24 per cent, and BSE 500 gained 0.20 per cent. However, BSE’s midcap and small cap scrips ended in the negative territory, with a loss of 0.23 per cent and 0.52 per cent.

“The earnings of upstream PSUs are likely to increase further only if price hike is higher than our assumption, or the upstream share of subsidy burden is reduced to 33 per cent from 40 per cent, which is unlikely.

“We believe any event-based rally further can be taken as an opportunity to book profit in the stocksince the reforms are not expected to bring any substantial jump in the earnings,” said Vinay Nair, Analyst, Karvy Stock Broking.

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