JK Tyre, IndiGo, Asian Paints Shares Rally Up To 5.6% On Thursday As Brent Crude Falls Below $100 Per Barrel

A fall in crude oil prices lifted aviation, tyre and paint stocks on Thursday. JK Tyre led the gains, with its shares rising 5.6% in early trade. IndiGo, Asian Paints and several oil marketing companies also traded higher.

Brent crude slipped below $100 per barrel after falling nearly 9% overnight. The decline came amid hopes of easing US-Iran tensions following the US midterm elections.

Which Stocks Saw The Biggest Gains?

Several stocks moved higher, with tyre makers, airlines, paint companies and oil marketing firms featuring among the notable gainers.

Here is a look at the stocks that advanced:

• JK Tyre: Touched ₹351.50.
• InterGlobe Aviation (IndiGo): Rose 5.04% to ₹5,400.
• Asian Paints: Gained 4.44% to ₹2,525.70.
• Apollo Tyres: Advanced 4.37% to ₹420.
• HPCL: Climbed 5.17% to ₹385.30, emerging as one of the early gainers.
• BPCL: Rose 3.63% to ₹315.75.
• Indian Oil Corporation (IOC): Added 3.10% to ₹146.43.
• CEAT: Gained 3.25%.
• Kansai Nerolac Paints: Advanced 2.84%.
• Berger Paints: Rose 2.75%.
• SpiceJet: Gained 1.83%.

Oil producers moved in the opposite direction, bucking the broader market trend.

• Oil India: Fell 3.07%.
• ONGC: Declined 1.60%.

The gains were visible across the wider market too. At 10:34 AM, the Sensex was up 1,447 points at 78,748.95, while the Nifty had added 414.65 points to reach 24,375.25.

What Is Driving The Fall In Crude Oil Prices?

Crude oil has now declined for four sessions in a row. Wednesday's sharp fall followed major Democratic victories in the US midterm Congressional elections. The outcome has raised hopes that tensions surrounding the US-Israeli conflict with Iran may ease.

In early Asian trade on Thursday, Brent futures slipped another 1.03% to $93.65 per barrel. WTI crude fell 1.29% to $86.98. Brent has lost around 20% this week, putting it on course for its steepest weekly decline since April 2020.

Why Are These Stocks Responding To Cheaper Oil?

The reason behind the buying is largely linked to costs. Airlines spend heavily on aviation turbine fuel, making IndiGo particularly sensitive to movements in crude prices.

Tyre makers have another reason to welcome the oil price correction. A good part of their raw material bill goes towards inputs such as synthetic rubber and carbon black, whose prices are influenced by crude. Paint companies are in a similar position, as several materials used in paint manufacturing are derived from petroleum. If crude oil prices stay low, both sectors could see some relief on the cost front.

For HPCL, BPCL and Indian Oil, cheaper crude can work in their favour if the prices they charge consumers do not fall at the same pace. ONGC and Oil India, on the other hand, have less to gain from the decline. Since they produce crude, a fall in global crude oil prices means they may receive less for every barrel sold.

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