Crude-Sensitive Stocks Fall As Brent Tops $95; HPCL, IOC, BPCL Lead Losses

Shares of crude oil-sensitive companies remained under pressure on Thursday as escalating geopolitical tensions in the Middle East drove crude prices sharply higher, raising concerns over input costs and profitability across sectors including oil marketing, aviation, tyres and paints.

At around 11:30 am, shares of Hindustan Petroleum Corporation (HPCL) emerged as the biggest loser among crude-sensitive stocks, falling 2.7%. Indian Oil Corporation (IOC) declined 2%, while Bharat Petroleum Corporation (BPCL) slipped 1.7%.

The selloff followed a sharp rebound in crude oil prices after fresh US strikes on Iran and Tehran's announcement regarding the closure of the Strait of Hormuz, one of the world's most critical energy shipping routes. Brent crude climbed above $95 per barrel during Asian trading hours, extending gains from the previous session.

OMCs Bear The Brunt

Oil marketing companies came under the most pressure as investors assessed the impact of higher crude prices on fuel marketing margins.

The decline comes even as state-run fuel retailers have already increased petrol and diesel prices several times in recent weeks to partially offset the impact of elevated crude costs.

A sustained rise in crude prices could further pressure margins and increase working capital requirements for downstream oil companies.

The weakness extended to aviation counters, where InterGlobe Aviation, the parent of IndiGo, slipped 0.2%.

Higher oil prices are typically negative for airlines because aviation turbine fuel (ATF) accounts for a significant portion of operating expenses.

Tyre manufacturers also witnessed selling pressure. JK Tyre & Industries fell 2.1%, while Apollo Tyres declined 1.3%.

The sector remains highly sensitive to crude movements as many key raw materials used in tyre production are derived from petroleum products.

Paint manufacturers, another segment exposed to crude-linked raw materials, also traded lower. Asian Paints fell 0.7%, while Kansai Nerolac Paints and Berger Paints India declined 0.6% and 0.4%, respectively.

Higher crude prices generally raise the cost of petrochemical-based inputs used in paint manufacturing, affecting margins.

Upstream Oil Producers Gain

In contrast, upstream energy producers benefited from the rise in crude prices. Oil India gained 0.6%, while Oil and Natural Gas Corporation (ONGC) rose 0.7%.

Higher crude prices are typically positive for exploration and production companies as they realise better prices for their output.

The divergence was also visible across the energy sector, with upstream producers outperforming while downstream fuel retailers lagged due to differing earnings sensitivities to crude oil movements.

Despite weakness in oil-sensitive stocks, broader market sentiment remained relatively stable.

At 11:30 am, the Sensex was up 89.9 points, or 0.12%, at 74,073.08, while the Nifty gained 24.95 points, or 0.11%, to trade at 23,239.90.

However, market breadth remained weak, with declining stocks outnumbering advances, indicating caution among investors amid rising geopolitical risks and higher energy prices.