Despite a 1,500 points fall in the Sensex, there are certain stocks that are still gaining in trade today. Almost all of the stocks from the oil marketing pack were extremely strong today, as crude prices dived by a mammoth 20 per cent in trade.
Oil marketing companies, which import crude and refine them into petroleum products like petrol, kerosene and diesel tend to benefit from falling crude prices. Shares in HPCL were up 7 per cent, while BPCL was up 5 per cent and Indian Oil, the largest oil marketing company was up 3 per cent.
The latter is also due to declare a dividend, which should make the stock even more attractive.
The fall in crude prices was largely after disagreements between OPEC and Russia on production cuts. This led to Saudi deciding to hike production and cut prices, triggering a full blown price war. Following this decision, crude prices plunged in trade.
It's likely that oil marketing companies would see a spectacular set of results in the next few quarters, as falling crude prices boost margins. The dividend yield on some of the stocks like Indian Oil are also likely to turn attractive, which should propel these stocks even higher.