Crude Falls Below $100; OMC, Aviation, Tyre Stocks Rally As Oil-sensitive Sectors Gain

Shares of crude-sensitive companies surged in early trade on Monday after global oil prices slipped below the $100-per-barrel mark, lifting sentiment for sectors that benefit from lower fuel and raw material costs. Oil marketing companies led gains, while tyre, airline and paint stocks also attracted buying interest as investors cheered the correction in crude prices.

Among oil marketing companies, Hindustan Petroleum Corporation (HPCL) climbed more than 4.5% to ₹407.25, while Bharat Petroleum Corporation (BPCL) gained nearly 4% to ₹306.45. Indian Oil Corporation (IOC) also advanced over 3% to ₹144.

Tyre makers also witnessed strong buying interest. JK Tyre jumped 4.5%, while CEAT gained 2.3% and Apollo Tyres rose nearly 2%.

The gains spread to other crude-sensitive sectors as well. InterGlobe Aviation, parent of IndiGo, climbed 1.81%, while Asian Paints and Berger Paints rose more than 1% each. Kansai Nerolac Paints also traded in positive territory.

Crude Drops

The rally followed a sharp decline in global crude prices, with Brent crude slipping below the psychologically important $100-per-barrel mark to trade at its lowest level in over two weeks. Brent futures fell 4.6% to $98.83 a barrel in early Asian trade, while WTI crude declined nearly 6% to around $92 per barrel.

The decline came amid optimism surrounding a possible breakthrough in US-Iran negotiations, raising hopes that the reopening of the Strait of Hormuz could ease supply disruptions and restore smoother oil flows from the Gulf region.

Lower crude prices are generally positive for oil marketing companies because they ease inventory and working capital pressures while improving marketing margins. Tyre and paint companies also benefit because many of their key raw materials are crude derivatives. Airlines gain through lower aviation turbine fuel costs, which remain among their largest expenses.

Expert Flags Inflation Risks

Despite the relief from lower crude prices, market experts cautioned that fuel-related inflation risks remain elevated.

Tushar Badjate, Director at Badjate Stocks & Shares, said the recent fuel price hikes mark a significant shift after nearly four years of frozen petrol and diesel prices.

He noted that fuel costs affect transport, logistics, food and manufacturing, making inflationary effects broader than just fuel prices at the pump. He added that India imports nearly 88% of its crude requirements, making the economy highly vulnerable to global disruptions and currency pressures.

Badjate said crude prices are unlikely to remain sustainably below $95 in the near term and warned that fuel prices are merely a symptom of wider inflationary challenges facing economies dependent on oil imports.

The strength in crude-sensitive stocks also lifted broader markets. By mid-session, the Sensex had gained more than 878 points while the Nifty rose over 1%, supported by easing oil prices and broad-based buying across sectors.