Nifty Oil & Gas index less than 2% away from 52-week high levels; HPCL, ONGC up over 5%
Helped by sharp gains in HPCL, ONGC and IOC, the Nifty Oil and Gas index inched higher sharply lifting the overall market mood.
![Nifty Oil & Gas index less than 2% away from 52-week high levels; HPCL, ONGC up over 5%](https://cdn.zeebiz.com/sites/default/files/2024/07/25/306711-pexels-introspectivedsgn-9216590.jpg?im=FitAndFill=(1200,900))
Nifty Oil and Gas index in a sudden show gained sharply and was last up around 2 per cent. The index designed to reflect the performance of the stocks belonging to the Oil, Gas and Petroleum industry iin factnfact is edging close to its 52-week high level of 13,194.45 and at day’s high is less than 2 per cent away.
In the previous day’s trade also the index closed higher by nearly 2 per cent, thus taking the total gains in 2 days to nearly 4 per cent.
Of the 15 constituents in total, 10 stocks traded in the green, while 5 were trading in the red, with ONGC, IOC and HPCL up over 5 per cent, while Oil India, BPCL, Petronet LNG up up to 4 per cent and more.
The sharp gains in the upstream oil major ONGC are propelled after the company commenced oil production from one of its Cluster-2 asset in January. The company in an exchange filing said that the company commenced oil production from the Block KG-DWN-98/2 Cluster-2 asset via a floating production, storage and offloading (FPSO) vessel in January, 2024. The Company has plan to open another well and flow gas to onshore terminal next month through the newly laid subsea gas pipeline, another milestone achievement in the offing, it added.
Atul Parakh, CEO of Bigul said the latest 2% increase in the Nifty Oil & Gas index, which follows a similar advance yesterday, indicates a confluence of favourable factors. A key driver is news from ONGC, a major index contributor. The business began oil production from its Cluster-2 asset in January 2024. This success, together with plans to open another well and begin gas production next month, represents considerable progress and increases investor confidence in ONGC's future prospects. This positive company growth is anticipated to leak over into the broader sector, perhaps attracting investors looking for exposure to the oil and gas industry.
Furthermore, overall market sentiment toward the oil and gas sector could be playing a role. Rising global energy prices, driven by factors such as growing demand and potential supply interruptions from geopolitical conflicts, may make the sector more appealing. Investors may be expecting future price increases and looking to capitalize on the possible gain. This is consistent with the robust performance of leading players such as ONGC, IOC, and HPCL, which all had gains of more than 5%, added the expert.
Other prominent businesses, such as Oil India, BPCL, and Petronet LNG, also saw big improvements, adding to the index's upward trend.
To summarize, the Nifty Oil & Gas index's recent gain looks to be driven by a combination of favourable company-specific developments, prospective tailwinds for the industry from rising global energy prices and geopolitical tensions, and great performance by prominent firms. Monitoring these elements, notably global energy costs and geopolitical developments will be critical in deciding the sector's future trajectory and if the current momentum can be maintained.
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