CLSA downgrades ONGC to "underperform" from "outperform". The brokerage also cuts IOC and HPCL to "sell" from "underperform".

CLSA says the rally in these state-owned stocks on the back of hopes for a hike in fuel prices is overdone, given any "sweeping" changes to pricing would be hard to implement in a "very busy" political calendar in 2013.

The brokerage adds Indian Oil and HPCL could see higher under-recoveries from a weaker rupee, while ONGC could see the government limit its subsidy burden in 2013.

IOC is down 0.3 percent, HPCL is down 0.6 percent, while ONGC is up 2.6 percent.