Reuters Market Eye - Shares in Indian oil marketing companies and refiners erase earlier sharp gains and turn negative as the spike in crude prices post-QE3 is seen offsetting the positive impact of the government's diesel price hike.
Hindustan Petroleum Corp
Indian Oil Corp
Brent crude has risen more than $1 a barrel towards $117 after the Federal Reserve announced a new asset-purchase programme on Thursday.
Goldman Sachs says the diesel hike in India would be positive for marketing and refining companies, but it could also lead to a lower subsidy payout from the government as well as oil explorers.
Fuel subsidies in India are borne by the government, marketing and refining companies, as well as explorers.
"While the price hike is positive for oil companies, the government will be biggest beneficiary, in our view," Goldman says in a note dated on Friday.