Stocks in news: Centre’s decision to hike windfall tax on domestic crude oil did not materially impact oil stocks on Thursday and the lacklustre show by the sector was on account of the weakness in crude oil, technical analyst Nilesh Jain opines.  

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The tax on crude oil produced by state-owned ONGC was hiked to Rs 10,200 per tonne from Rs 9,500 per tonne, with effect from Thursday, according to a government notification. The stock was trading at Rs 143.35, up 0.31 per cent. 

Nifty Oil & Gas index was trading nearly flat at 8,307.80 with six stocks in the 15-share index trading in the green. The top gainers were Castrol India, Hindustan Petroleum and Reliance Industries. The top losers were Indraprastha Gas, Oil India Limited and Gujarat Gas Limited.

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Among other decisions, the government has reduced the rate on export of diesel to Rs 10.5 per litre, from Rs 13 per litre. The levy on diesel includes Rs 1.50 per litre road infrastructure cess. The export tax on jet fuel though has been left unchanged, which stands at Rs 5 a litre.  

The revision in windfall tax is done every fortnight.

Jain, who is Assistant Vice President - Lead Derivative and Technical Research at Centrum Broking, advised against any buying in oil and gas stocks if the investor has a near term view. He said that the sector is currently bereft of any major triggers.

The Centrum analyst suggested buying with a long term perspective only on every decline.  

Jain said that investors could look to buy IOCL with a perspective of dividend. BPCL is another stock where buying can be done in a staggered form and on declines.      

Crude is expected to remain in the range between USD 85 and USD 95, Anuj Gupta, Vice President of Commodity and Currency Research at IIFL Securities, said. He added that the current weakness in Dollar may further hit prospects of crude oil, though it works positive for gold. Movement in USD is inversely related to the gold price movement.

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While renewed demand on the back of easing of Covid-19 restrictions in China augurs well for the prospects of crude oil, growing stockpile in the US will likely be counterproductive from pricing point, Gupta said. 

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)