HPCL Shares Surge 4.5%, BPCL Gains 3.7% Amid Decline in Crude Oil Prices Below $100

Crude Prices Tumble Below $100, Sentiment Boosts Oil-Sensitive Stocks

Shares of companies sensitive to crude prices surged in early trade on Monday after global oil prices plummeted below the $100-per-barrel mark, lifting sentiment for sectors that benefit from lower fuel and raw material costs.

The rally followed a steep overnight decline in oil prices, with Brent crude futures dropping below $100 a barrel to their lowest level in more than two weeks. This was due to growing optimism that the United States and Iran could move closer to an agreement to reopen the Strait of Hormuz and restore normal oil flows from the Gulf region.

Crude Price Comparison

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Among oil marketing companies, Hindustan Petroleum Corporation rose 4.5 percent to Rs 407.25, Bharat Petroleum Corporation gained 3.7 percent to Rs 306.45 and Indian Oil Corporation advanced 3.3 percent to Rs 144. Tyre stocks also attracted strong buying interest, with JK Tyre jumping 4.5 percent, CEAT gaining 2.3 percent and Apollo Tyres rising nearly 2 percent.

The gains extended to other sectors that are highly sensitive to crude prices. InterGlobe Aviation, the parent of IndiGo, climbed 1.6 percent, while paint makers Asian Paints and Berger Paints rose about 1 percent each. Kansai Nerolac Paints also traded in positive territory.

Lower crude prices are typically positive for oil marketing companies as they reduce inventory and working capital pressures while improving marketing margins. Tyre manufacturers and paint companies benefit from softer raw material costs because many of their inputs are derived from crude oil. Airlines also gain from the prospect of lower aviation turbine fuel costs, one of their largest operating expenses.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The strength in crude-sensitive stocks added to the broader market rally. At around 9:20 am, the Sensex was up more than 835 points and the Nifty had gained over 1 percent, supported by easing oil prices, improving global sentiment and broad-based buying across sectors.