Tata Motors, IndiGo, M&M Shares Fall as Crude Oil Prices Cross $100; Auto, Aviation Stocks Under Pressure

Auto and aviation stocks traded lower on Friday after crude oil prices climbed above $100 a barrel, with investors turning cautious on sectors that are most exposed to higher fuel and input costs amid escalating tensions in West Asia.

The Nifty Auto index was down 1.02% at 27,240.50 around midday, underperforming the broader market. The Sensex fell 577.87 points, or 0.76%, to 75,813.52, while the Nifty 50 declined 166 points, or 0.70%, to 23,703.60. India VIX rose 5.34% to 14.20, signalling increased volatility.

Hero MotoCorp led the decline on the auto index, falling nearly 2.8%. Mahindra & Mahindra slipped about 2.4%, while InterGlobe Aviation, the parent company of IndiGo, lost close to 2% as higher aviation turbine fuel (ATF) costs remained a concern. Tata Motors, Bajaj Auto, Eicher Motors, TVS Motor and SpiceJet also traded in the red. Maruti Suzuki was the only major auto stock trading marginally higher.

The selling followed another sharp move in crude oil after fresh attacks on Saudi oil tankers in the Red Sea renewed concerns over disruptions to global energy supplies. The developments added to existing worries around the Strait of Hormuz and the Bab el-Mandeb shipping corridor, two key routes for global crude exports.

According to Kotak Neo Research, Brent crude settled at $100.7 a barrel on Thursday after touching an intraday high of $102, extending gains for a fifth straight session. WTI crude closed 6% higher at $92.2. Oil prices eased slightly on Friday but remained on track for strong weekly gains as geopolitical risks continued to dominate sentiment.

Higher crude prices tend to raise manufacturing costs for automakers through petroleum-based raw materials such as plastics, synthetic rubber and paints. For airlines, the impact is more immediate as aviation turbine fuel is among the largest operating expenses, leaving little room to absorb a sustained rise in fuel costs without affecting profitability.

The rally in oil has also revived concerns over inflation and the interest rate outlook, prompting investors to trim exposure to sectors that are typically more sensitive to higher energy prices.