scorecardresearchONGC, RIL shares jump up to 7% in early trade after govt cuts windfall

ONGC, RIL shares jump up to 7% in early trade after govt cuts windfall tax on petroleum

Updated: 20 Jul 2022, 09:35 AM IST
TL;DR.

  • Analysts believe cut in windfall tax on exports will be a major boost for the sector.

Shares of ONGC opened at  <span class='webrupee'>₹</span>134.70 against the previous close of  <span class='webrupee'>₹</span>127.45 and jumped 7% to  <span class='webrupee'>₹</span>136.40 soon.

Shares of ONGC opened at 134.70 against the previous close of 127.45 and jumped 7% to 136.40 soon.

Shares of Reliance Industries (RIL) and Oil and Natural Gas Corporation (ONGC) vaulted up to 7% in early deals on BSE on July 20 boosted by the cut on windfall tax on petroleum.

As Bloomberg reported, less than three weeks after they were imposed, the government reduced the windfall tax on diesel and aviation fuel shipments by 2 rupees (3 cents) a liter, and scrapped completely a 6-rupees-per-liter levy on gasoline exports, according to a government notification. It also cut the tax on domestically produced crude by about 27% to 17,000 rupees a ton.

"The relief announced by the government for the petroleum sector through the reduction in windfall tax and cuts in duties on exports will be a major boost for the sector, particularly for RIL," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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Share price reaction of Reliance Industries and ONGC after Govt cut windfall tax on crude oil

"However, investors have to exercise some caution because selling may reemerge at higher levels," he added.

Shares of ONGC opened at 134.70 against the previous close of 127.45 and jumped 7% to 136.40 soon while those of RIL opened at 2,535 against the previous close of 2,441.20 and jumped 4.25% to 2,545.05 withing the first 5 minutes of trade.

Around 09:25 am, the shares of ONGC were up 6.20% at 135.35 while those of RIL were up 2.44% at 2500.65.

Market benchmark the Sensex was 1.03% up at 55,332.50 with only one stock- Nestle (down 0.51%) - in the red.

Shares of Tech Mahindra, RIL, Infosys, HCL Tech and TCS were among the top gainers in the Sensex index. Among the sectoral indices, IT and energy rose up to 2%.

Disclaimer: The views and recommendations made above are those of individual analysts or broking firms and not of MintGenie.

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First Published: 20 Jul 2022, 09:35 AM IST