Crude-Sensitive Stocks Fall As Oil Prices Cross $115 Per Barrel

Shares of crude-sensitive companies including InterGlobe Aviation, SpiceJet and Asian Paints declined sharply in early trade on Monday after global crude oil prices surged above $115 per barrel, according to Reuters and data from the National Stock Exchange (NSE).

The sharp increase in crude oil prices followed escalating tensions in the Middle East involving the United States, Israel and Iran, which raised concerns about supply disruptions through the Strait of Hormuz, a key global oil transit route.

At around 09:25 AM, the benchmark BSE Sensex was down about 2,401 points, or 3.04%, at 76,517, while the NSE Nifty 50 declined about 727 points, or 2.97%, to 23,723, according to exchange data.

Market breadth on the NSE was sharply negative, with more than 2,600 stocks declining compared with about 537 advancing.

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Airline And Tyre Stocks Decline

Airline companies were among the biggest losers during the session. Shares of InterGlobe Aviation, which operates IndiGo, dropped more than 7% in early trade, while SpiceJet declined about 6%, according to NSE data. Airlines are considered sensitive to crude oil prices because aviation turbine fuel forms a significant part of their operating costs.

Tyre manufacturers also recorded notable declines. JK Tyre shares fell about 6.5%, while Apollo Tyres declined nearly 4% during the session.

Tyre companies depend on crude-linked raw materials for production, making them sensitive to movements in global oil prices.

Paint Companies Under Pressure

Paint manufacturers also saw declines as crude oil derivatives are used in the production of paints and coatings.

Shares of Asian Paints slipped more than 4% in early trade. Berger Paints, Kansai Nerolac, and Akzo Nobel India also declined between 3% and 4%, according to NSE data.

These companies rely on petrochemical inputs derived from crude oil for manufacturing paint products. 

Oil Price Surge And Market Volatility

Reuters says that prices for crude oil around the world shot up sharply because of rising tensions in the Middle East, which made people worry that energy supplies and shipping routes in the Gulf region might be disrupted.

The climb in crude oil prices rattled global financial markets. The India VIX, which measures expected market volatility, jumped more than 20% during the day's trading. This uptick also points to a growing sense of unease among investors.

Stocks that are sensitive to crude oil fell at the same time as the stock market as a whole. Apart from airline and paint companies, several large-cap stocks such as Maruti Suzuki, Larsen & Toubro, and State Bank of India also traded lower in early trade, according to NSE data.

Movements in global crude oil prices remain a key factor influencing sectors that depend on fuel or petrochemical inputs, and trading activity in these stocks reflected the broader reaction of equity markets to the surge in oil prices.