BPCL, HPCL Slide Over 3%; Asian Paints, IndiGo Fall As Crude Tops $100, Dents Sentiment

Mumbai, April 13:Shares of oil marketing companies and crude-sensitive sectors came under sharp selling pressure on April 13, after global crude prices surged past the $100-per-barrel mark, triggering concerns over rising costs and margin compression.

Stocks of Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) declined more than 3 per cent in early trade, tracking the spike in crude prices following escalating geopolitical tensions in the Middle East.

The sell-off extended beyond oil retailers to other crude-sensitive sectors. Shares of Asian Paints and InterGlobe Aviation (IndiGo) also fell, as higher oil prices raised concerns over input cost pressures and profitability.

Oil Surge Hits Margins

The weakness in oil marketing companies (OMCs) comes as higher crude prices directly squeeze their marketing margins. These companies often face a lag in passing on increased fuel costs to consumers, especially in a regulated pricing environment, which weighs on earnings.

Recent market moves highlight this sensitivity—OMC stocks fell up to 4 per cent after crude jumped above $100 per barrel amid geopolitical tensions.

Paints, Aviation Stocks also Under Pressure

The impact of rising crude isn’t limited to fuel retailers.

• Paint companies like Asian Paints and Indigo Paints rely heavily on crude-linked derivatives as raw materials. Higher oil prices increase input costs, squeezing margins.
• Aviation firms such as InterGlobe Aviation (IndiGo) face higher aviation turbine fuel (ATF) costs, which form a significant portion of operating expenses.

This explains the broad-based decline in crude-sensitive stocks, with several names falling 3–4 per cent during the session.

Markets Turn Risk Off

The spike in oil prices follows the collapse of US-Iran talks, which has reignited fears of supply disruptions, particularly around key shipping routes in the Gulf.

The broader market reaction has been negative, with benchmark indices declining sharply and volatility rising, as investors reassess inflation risks and the potential impact on corporate earnings.

A familiar Pattern

The current sell-off mirrors previous episodes where crude spikes triggered declines in downstream and consumption-linked sectors. Just days ago, the same stocks had rallied when oil prices cooled on hopes of a ceasefire—only to reverse course as tensions resurfaced.

Outlook

Analysts caution that if crude sustains above $100, pressure on OMCs, paint companies, and aviation stocks could persist. Much will depend on how long geopolitical tensions remain elevated and whether oil prices stabilise.

For now, the market narrative is clear: as crude climbs, margin fears return—and crude-sensitive stocks are back in the firing line.

Source: https://www.nseindia.com/