Crude-sensitive stocks rallied as Brent crude fell below $90 per barrel on hopes of a US-Iran peace agreement.
IndiGo, HPCL and BPCL gained up to 4%, while tyre and paint stocks also advanced on expectations of lower input costs.
The rally helped lift the Sensex by nearly 1,000 points and pushed the Nifty back above 23,400.
Crude-Sensitive Stocks Rally As Oil Slips Below $90; IndiGo, HPCL, BPCL Jump Up To 4%
Airlines, OMCs, tyre and paint stocks gain as easing Middle East tensions drag crude prices lower; Sensex surges nearly 1,000 points
Summary
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Shares of crude-oil-sensitive companies rallied sharply on Friday after a steep decline in global crude prices boosted sentiment across sectors such as aviation, oil marketing, tyres and paints.
The rally helped lift broader markets, with the Sensex gaining nearly 1,000 points and the Nifty reclaiming the 23,400 mark in intraday trade.
At around 12 pm, the Sensex was up 856 points, or 1.16%, at 74,697.93, while the Nifty advanced 223.30 points, or 1%, to 23,384.65. Market breadth remained firmly positive, with 2,051 stocks advancing against 307 declines.
Airlines And OMCs Lead Gains
Airline stocks emerged among the biggest beneficiaries of the fall in crude prices. Shares of InterGlobe Aviation, the parent of IndiGo, rose more than 3% to ₹4,644.
Lower crude prices are generally positive for airlines as aviation turbine fuel (ATF) is their single-largest operating expense, directly impacting profitability.
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State-run oil marketing companies also witnessed strong buying interest.
Hindustan Petroleum Corporation (HPCL) gained 3.6%, while Bharat Petroleum Corporation (BPCL) rose 3.4%. Shares of Indian Oil Corporation (IOC) advanced 2.3%.
Lower crude prices typically improve fuel marketing margins and reduce concerns over under-recoveries and pricing pressures for fuel retailers.
Tyre manufacturers also outperformed as softer oil prices are expected to ease raw material costs.
Apollo Tyres gained 2.2%, while JK Tyre & Industries rose 2.6%. Shares of CEAT climbed 1.7%.
Paint companies joined the rally as crude-linked inputs account for a significant share of production costs. Asian Paints gained 1.5%, while Berger Paints India advanced nearly 1%.
Crude Falls Below $90
The gains followed a sharp decline in oil prices after Brent crude slipped below the $90-per-barrel mark.
Investor sentiment improved after US President Donald Trump indicated that a peace agreement with Iran could be signed as early as this weekend. Easing geopolitical tensions have fuelled hopes of improved energy supplies and reduced the geopolitical risk premium embedded in oil prices.
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While downstream sectors rallied, upstream oil producers traded lower as declining crude prices could weigh on earnings realisations.
Shares of Oil India fell 1.5%, while Oil and Natural Gas Corporation (ONGC) declined 1.4%.
The divergence highlights the contrasting impact of oil price movements on different segments of the energy value chain, with consumers of crude benefiting while producers face pressure on revenues.