BPCL, IndiGo, And Zomato Lead Slide On Crude Among Oil Sensitive Stocks

Mumbai, May 18: Shares of crude-sensitive companies witnessed sharp selling pressure on Monday as surging global oil prices rattled investor sentiment and raised concerns over higher input costs and margin pressures across sectors ranging from oil marketing and aviation to paints and consumer businesses.

Stocks such as BPCL, IndiGo and Zomato owner Eternal fell up to 3% after Brent crude climbed above $111 per barrel. The spike in oil prices followed escalating geopolitical tensions in the Middle East after a drone strike on a nuclear facility in the United Arab Emirates intensified fears of supply disruptions in the region.

The rally in crude prices also comes amid continuing uncertainty around the US-Iran conflict and concerns surrounding the Strait of Hormuz, a crucial global oil transit route through which nearly one-fifth of the world’s oil supply passes.

BPCL had fallen as much as 2.7% but managed to somewhat recover and trade 0.8% lower at Rs 282.20. Source: NSE

Oil marketing companies bore the brunt of the selloff as investors worried that elevated crude prices could squeeze refining and marketing margins. BPCL, along with peers Indian Oil Corporation and Hindustan Petroleum Corporation, remained under pressure despite recent fuel price hikes announced by the government. If crude prices remain elevated for a prolonged period, oil retailers may struggle to fully pass on higher input costs to consumers, especially in a politically sensitive environment.

IndiGo pared losses to trade one percent lower at Rs 4,270. Source: NSE 

Aviation stocks also traded weak as rising crude prices directly impact aviation turbine fuel (ATF) costs, which account for a significant share of airline operating expenses. IndiGo shares slipped as investors assessed the likely impact of sustained fuel inflation on profitability, particularly at a time when airlines are also facing currency pressures due to a weakening rupee.

Consumer-facing companies linked to crude derivatives also witnessed selling pressure. Paint, chemical and packaging companies are vulnerable to rising prices of petroleum-based raw materials, which can compress margins if demand conditions limit pricing power. Concerns over inflationary pressure and higher manufacturing costs weighed on sentiment across several industrial and consumer sectors.

For example, shares of Zomato owner Eternal declined 2.68% over fears that rising LPG costs could drag on food delivery.

Zomato owner Eternal fell over three percent before paring losses to trade 0.4% lower at Rs 240.14. Source: NSE

The weakness in crude-sensitive stocks also mirrored the broader risk-off mood in domestic and global markets. Asian equities traded sharply lower, while the Indian rupee slipped to a fresh record low against the U.S. dollar as investors moved away from risk assets.

Rising oil prices remain a major concern for India, which imports more than 80% of its crude oil requirements. Higher crude prices not only worsen inflationary pressures but also strain the country’s current account deficit and weigh on the rupee, increasing the overall cost burden for oil-dependent industries.

Market volatility could persist in the near term if geopolitical tensions continue to escalate or if crude prices sustain above current levels. Investors are expected to closely monitor developments in the Middle East along with the trajectory of global oil markets for further cues.

Source:

• https://www.nseindia.com/get-quote/equity/BPCL/Bharat-Petroleum-Corporation-Limited
• https://www.nseindia.com/get-quote/equity/INDIGO/InterGlobe-Aviation-Limited,
• https://www.nseindia.com/get-quote/equity/ETERNAL/ETERNAL-LIMITED