CEAT, IndiGo, SpiceJet Stocks Drop With Breton Crude Oil Prices Above $126 Per Barrel

The stocks of companies exposed to crude oil saw their stocks fall on April 30 after the Brent crude oil prices rose above $126 per barrel during the intraday trading session.

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Brent crude futures climbed as much as 3.63% to $122.31 per barrel after touching an intraday high of $126.41, its highest level since March 2022. The rally in crude prices followed growing concerns over prolonged disruption in Middle East oil supplies amid escalating tensions between the U.S. and Iran.

Tyre Stocks Decline On Input Cost Concerns

Tyre companies witnessed sharp selling pressure during the session as investors assessed the impact of rising crude-linked raw material costs.

CEAT shares declined 4.86% to ₹3,449, while Apollo Tyres slipped 2.65% to ₹412.90. JK Tyre & Industries fell 1.60% to close at ₹400.45.

The tyre manufacturing industry is reliant on raw materials sourced from crude oil, including synthetic rubber and carbon black, and is thus vulnerable to changes in oil prices.

Aviation Stocks Under Pressure

Aviation stocks were down too, as rising crude oil prices had sparked worries regarding the cost of aviation turbine fuel, which is among the most significant operating costs of an airline.

SpiceJet stocks fell 3.79% to ₹13.44, whereas shares of InterGlobe Aviation, which operates airline IndiGo, fell 2.76% to ₹4,226.10 in afternoon trading.

A rise in the cost of aviation fuel might have increased the operating costs of the airlines, which would affect their profitability.

Oil Marketing Companies Weaker

Stocks of oil marketing firms were weak due to investor concerns regarding the implications of elevated oil prices on marketing margins.

Hindustan Petroleum Corporation Limited (HPCL) declined 2.14%, Bharat Petroleum Corporation Limited (BPCL) slipped 1.38%, while Indian Oil Corporation (IOC) fell 1.30%.

Paint Stocks Mixed Amid Crude Rally

Paint stocks showed mixed movement during the session. Asian Paints declined 0.99%, while Berger Paints rose 1.18%. Kansai Nerolac Paints traded largely unchanged.

Paint manufacturers use crude-linked products such as solvents and resins, making sustained increases in crude prices an important cost factor for the industry.

Broader Markets Trade Lower

The broader market also traded in negative territory on April 30. At around 1 pm, the Sensex was down 730 points, or 0.94%, at 76,766, while the Nifty 50 declined 239 points to 23,939.

Market breadth remained weak, with 2,451 stocks declining against 1,243 advancing shares on the exchanges.

The increase in the price of crude oil has been due to the disturbance in tanker traffic through the Strait of Hormuz, which is a crucial oil passage for about 20% of the world's oil resources. India's stock markets have been affected by political unrest and problems with the supply of goods, which have made the commodity markets unstable.