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The global oil market today, January 13 saw a sharp spike in Brent crude prices, surpassing USD 81 per barrel, and hitting a three-month high. This recent surge has sent shockwaves throughout the oil-sensitive sectors, triggering out concerns and a significant decline in the stock prices of oil marketing companies (OMCs) as well as airlines, paint manufacturers, and tyre producers.
Oil and gas sector stocks
In response to this surge in crude oil prices, the oil marketing companies like Hindustan Petroleum Corp (HPCL), Bharat Petroleum Corp (BPCL), and Indian Oil Corp (IOC) were among the hardest hit in early trading. As of 11:38 AM IST, shares of HPCL were trading at Rs 365.75, down by 5.84%, BPCL at Rs 270.20 apiece, down by 2.68%, and IOC at Rs 123.76 apiece, down by 5%.
Additionally, Adani Total Gas was down by 4.40%, Castrol India by 3.13%, Gail by 1.98%, and Gujarat Gas by 1.67%, with the majority of stocks in the red.
Also Read: 6 reasons FIIs are selling Indian stocks like there’s no tomorrow…
The rising crude oil prices come amid new US sanctions on Russian oil producers, which are expected to disrupt oil supplies to major importers like China and India. This development has raised concerns for companies that rely heavily on crude as a key input for their operations.
Paint Stocks
Apart from the oil and gas companies, the paint segment also had an impact of this crude oil price hike, especially companies like Asian Paints, Berger Paints, and Akzo Nobel stocks hitting the most.
This was a reflection as paints require a wide range of petrochemical-based raw materials, including solvents and resins, which are derived from crude oil. As crude prices rise, so do the costs for these essential materials, forcing paint manufacturers to either absorb the higher costs or pass them on to consumers. .
Asian Paints saw its stock fall by 1.84% by 11:49 AM IST, while Akzo Nobel India dipped by 97 percent. The shares of Berger Paints were trading at Rs 455.45 apiece, down by 1.19%.
Tyre Stocks
On a similar note, tyre manufacturers are feeling the pinch. The increase in the crude oil price also directly impacts the tyre stocks as this raw material is used in the production of synthetic rubber and other chemicals used in the tyre manufacturing.
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