Mumbai: Bucking the weak market trend, shares of oil PSUs on Monday rose by as much as 4 percent as diesel price was hiked by 45 paisa per litre last week.
ONGC climbed 2.96 percent to settle at Rs 304.60, while Oil India shot-up by 4.16 percent to Rs 509.60 on the BSE. BPCL moved up by 2.03 percent. In the private sector space, Cairn India closed marginally higher.
Led by gains in these stocks, the BSE oil and gas index ended at 8,463.18, up 0.49 percent.
"Oil PSUs outperformed due to the diesel price hike announcement on Friday reviving sentiments for the sector," said Gautam Sinha Roy, VP - Equity Strategy & Product, Motilal Oswal Securities.
The government had in January authorised state-owned oil firms to hike diesel prices by small doses of up to 50 paisa per litre every month till such time that their losses on the fuel sale are completely wiped out.
Oil firms are likely to end the fiscal with an under- recovery or revenue loss of Rs 1,63,000 crore on diesel, LPG and kerosene sale.
Meanwhile, the BSE benchmark Sensex ended the day 54.18 points down at a new four-month low of 18,681.42.