Morgan Stanley upgrades ONGC to overweight; stock rallies 13%

Oil and Natural Gas Corporation (ONGC), which has lost nearly a third of its market value this year, climbed 13 percent after Brent rose above $50 for the first time since March, as coronavirus vaccination rollouts kept hopes alive that demand for crude would build up next year.

ONGC has touched Rs 100 mark for the first time in this year and Morgan Stanley has upgraded the stock to overweight from an equal-weight earlier.

The brokerage house is positive on ONGC because of three factors – there is global demand recovery in the oil and gas space, secondly, there is also consolidation in the global refinery industry and the third is that the stock can reverse all the weakness that they saw because of the COVID-led shock.