Stock Market goes full tank on gas in sectoral shift

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By S Jha

New Delhi, February 2: A day after the presentation of the interim budget by Finance Minister Nirmala Sitharaman, indices took off to a new flight in the early session of Friday before the traders booked profit to shave off a large portion of the gains in the day. While the interim budget was seen as too dull, the market turned the spotlight on the sectors which are aligned with the future roadmap of the Narendra Modi-led government at the Centre.

The Dalal Street turned the shines on the energy sector on cues of Sitharaman speaking of the energy corridor while speaking on railways. Also, the street appears to have gained confidence that the Modi government may seriously pursue the path of the energy transition in line with the theme trending globally in clean energy transition.

There appears a sense in the street that the oil and gas sector could be the next big space which may find the attention of the government after the solar power push. The frenzy in the solar sector companies in the equity market has already taken the shares of the companies to the maddening levels.

With the oil and gas PSUs embarking on major transformation to take stakes in the clean energy transition space, the investors appear to be taking close look at the likes of Bharat Petroleum, Hindustan Petroleum, ONGC, Gail, and others. Even Coal India is in the spotlight for its ambitious plans for clean energy transformation. The PSUs are being seen by the investors to be capable of the capital depth to undertake the scale for the transformation. Besides, the oil and gas PSUs are comparatively seen by market participants trading at attractive levels as they trade in single digit PEs. Incidentally, the likes of BCPL and HPCL have PEs of just about four.

This theme seemingly found traction in the street on Friday as BPCL spurted by over 10 per cent while at one time time it had gained almost 15 per cent. Incidentally, BPCL saw such a massive jump in its share price in a single days for the first time in at least a couple of years.

ONGC also gave a strong company to BPCL as it also gained almost five per cent. ONGC has already logged in almost 10 per cent share jump in a single day in recent days. Market participants claim that ONGC after giving a breakout at about Rs 224 level last month is steadily gaining strength.

(Disclaimer: This article makes no recommendation for buy of sell of shares of any company).

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