Natural gas stocks rallied up to 12% during Thursday's trading session, with Adani Total Gas leading gains at 12% to hit an intraday high of ₹575.75 from the previous close of ₹515.65. According to Upstox, the stock was trading at ₹561, up 8.86% as of early market hours, with trading volumes jumping to more than 28 million due to high investor interest. The strong performance came despite broader market weakness, with the NIFTY50 trading 2.08% lower at 23,282.65 points and the BSE SENSEX crashing over 2,000 points to 75,069.96, as reported by Upstox.
The rally appears to be driven by escalating US-Iran conflict and rising crude oil prices crossing $112 per barrel due to drone attacks on Iran's South Pars natural gas field. As reported by Upstox, the latest developments show that US and Israeli drones attacked Iran's largest oil field, causing significant damage to energy facilities and forcing them offline. Iran retaliated by attacking Ras Laffan Industrial City in Qatar with missile strikes, further escalating the West Asia crisis. This geopolitical tension has created supply chain disruptions that are benefiting natural gas distribution companies like Adani Total Gas.
Despite the positive sentiment, Adani Total Gas has confirmed that geopolitical escalations in the Middle East have disrupted natural gas supplies, forcing some suppliers to curtail deliveries. According to reports from ET Now, this has impacted the company's ability to serve industrial customers, highlighting the ongoing challenges in the global gas supply chain. The disruptions have created operational difficulties for the company's industrial customer base, making the current geopolitical tensions particularly relevant to the company's operational outlook.
Gujarat Gas shares jumped 8.8% to ₹387.20 during early trading, with volumes exceeding 6.6 million shares. Gujarat State Petronet surged 6.6% to ₹275.60 with trading volumes of more than 1.7 million shares. Mahanagar Gas gained over 3% to ₹1,032 with volumes of more than 447,700 shares. Oil & Natural Gas Corporation (ONGC) rose more than 2% to ₹271.05 with trading volumes of more than 10 million shares. All these companies have been under pressure in recent sessions, with Adani Total Gas losing 5.48% in the last five sessions, Gujarat Gas down 6.87%, and Gujarat State Petronet declining 7.66% over the same period.
The stock remains under Additional Surveillance Measure (ASM) framework, specifically Stage 1, implemented by the National Stock Exchange of India (NSE), as reported by ET Now. This classification indicates that the stock is being closely monitored due to unusual price or volume activity, typically involving higher margin requirements to curb excessive speculation. The stock has delivered mixed returns with 8.23% decline over the past week but rebounded strongly with 15.13% gain over the last two weeks. The current rally represents a significant recovery from recent weakness, with the company benefiting from both geopolitical tailwinds and renewed investor interest in the gas distribution sector.
