Oil Prices Near $110 Put Pressure On Airlines, OMCs, Paint And Tyre Stocks

Shares of airlines, oil marketing companies (OMCs), paint makers, and tyre companies came under pressure on Friday as crude oil prices extended their sharp rise. Brent crude climbed 1% to $108.68 a barrel in early Asian trade after gaining more than 6% on Thursday, while US West Texas Intermediate (WTI) crude rose 1% to $103.45.

SpiceJet was among the biggest losers in early trade, with its shares falling 4.6% to ₹8.48. At 10:30 AM, it was still down 3.82% at ₹8.55.

Up until the same time, Hindustan Petroleum Corporation (HPCL) had declined 2.33% to ₹344.45, while InterGlobe Aviation (IndiGo) slipped 1.3% to ₹4,880.50. BPCL fell 1.95% to ₹297.10, and Indian Oil Corporation (IOC) declined 0.63% to ₹134.09.

The selling was not limited to oil-related stocks. Kansai Nerolac Paints fell 1.9%, Asian Paints dropped 1.94%, and Berger Paints slipped 0.36%. Among tyre companies, Apollo Tyres, JK Tyre & Industries, and CEAT declined around 0.6-1.6%.

Why Are Oil-Sensitive Stocks Under Pressure?

The jump in crude prices is putting some of India’s oil-sensitive companies on the back foot. Airlines, in particular, could see their costs rise as jet fuel prices respond to higher crude. OMC stocks may also come under pressure if they are unable to pass the increase in global oil prices on to consumers.

Paint and tyre makers have a similar concern. Both sectors use crude-linked materials in their products, so a prolonged rise in oil prices could add to their input costs.

The latest rise in oil prices comes amid growing concerns about supply disruptions in the Middle East. Attacks along important shipping routes, restrictions around the Strait of Hormuz, and attacks on tankers have added to worries about global energy supplies. The seizure of Yemen's port of Mocha by Iran-aligned Houthis has also increased concerns over traffic through the Red Sea.

Which Oil Stocks Moved Against The Trend?

Not every oil-linked stock fell. Upstream producers moved higher as investors considered the possibility of better realisations from elevated crude prices.

ONGC shares gained 2.2% to ₹242.57 before paring most of the gains and trading 0.025% higher at 10:39 AM. This gain stood in contrast to the declines seen among refiners and fuel retailers.

With Brent crude now close to $110 a barrel, investors are likely to keep a close watch on how long the supply concerns persist and whether elevated energy costs begin to weigh more broadly on corporate earnings and the Indian economy.

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