CEAT, Other Tyre Stocks Deflate As Indigo And Spicejet Fly Into Turbulence Over Oil Boil

Mumbai, April 30: Shares of crude-sensitive companies came under pressure in Thursday’s trade, with stocks such as CEAT, InterGlobe Aviation and SpiceJet falling up to 5%, as a sharp spike in global oil prices weighed on sentiment. 

The weakness follows a surge in Brent crude, which briefly crossed $126 per barrel, marking its highest level since March 2022, amid escalating geopolitical tensions and fears of prolonged supply disruptions.  

The rise in oil prices has triggered broad-based selling across sectors that are directly or indirectly linked to crude, with tyres, aviation and oil marketing companies (OMCs) bearing the brunt of the pressure. 

Tyre Puncture 

Among the key losers, CEAT dropped nearly 4.8% at Rs 3,451, while other tyre makers such as Apollo Tyres and JK Tyre also declined. Tyre companies are particularly vulnerable to crude movements as key raw materials like synthetic rubber and carbon black are derived from petroleum, making input costs highly sensitive to oil price fluctuations. 

Tyre maker CEAT was singed by oil today. Source: NSE  

Aviation stocks also saw sharp declines, with IndiGo and SpiceJet slipping as rising crude prices pushed up aviation turbine fuel (ATF) costs, the single largest expense component for airlines. Higher fuel costs directly squeeze margins and raise concerns about profitability, especially in a competitive pricing environment. Recently, the airlines had sent out an SOS seeking immediate government help, including a revision in fuel pricing mechanisms, cuts in taxes such as excise duty, and financial support to stabilise operations, failing which the carriers had warned of route rationalisation, reduced capacity, or even broader disruptions to services.  

At the time of writing, IndiGo was down 1.87 per cent at Rs 4,264. 

IndiGo has been trading in the red due to elevated oil prices. Source: NSE 

 OMCs Decline 

Oil marketing companies, too, traded under pressure as elevated crude prices tend to compress marketing margins, particularly when retail fuel prices cannot be fully adjusted in line with global rates. 

The trigger for the latest spike in oil prices is the deepening geopolitical standoff involving the U.S. and Iran, which has heightened fears of supply disruptions in the Middle East—a region that accounts for a significant share of global oil production.  

The broader market reaction underscores a familiar pattern: when crude rises, oil-sensitive stocks fall. Higher oil prices not only inflate input costs but also stoke inflation, tighten financial conditions and dampen overall demand, creating a double hit for sectors dependent on fuel or petrochemical derivatives. 

The impact is particularly pronounced for India, one of the world’s largest crude importers. Elevated oil prices widen the trade deficit, pressure the rupee and increase cost burdens for companies, amplifying the negative sentiment across equities. 

Market participants note that the current sell-off is largely driven by margin concerns rather than demand destruction, with investors recalibrating earnings expectations for crude-linked sectors. 

What next?
The trajectory of these stocks will remain closely tied to crude price movements. If oil prices stay elevated, pressure on margins could persist, keeping these sectors under stress. Conversely, any easing in geopolitical tensions—and by extension crude prices—could quickly revive sentiment, as seen in previous phases of the market. 

For now, crude remains the puppet master—and these stocks are moving to its tune. 

Source: https://www.nseindia.com/get-quote/equity/INDIGO/InterGlobe-Aviation-Limited, https://www.nseindia.com/get-quote/equity/CEATLTD/CEAT-Limited, NSE