Shares of crude oil-sensitive sectors including paint makers, tyre firms and oil marketing companies declined on Monday as Brent crude rose above USD 71 per barrel, raising concerns over higher input costs and inflationary pressure.
Shares of Hindustan Petroleum Corporation Ltd (HPCL) fell 1.61 percent to settle at Rs 428.9 apiece on the NSE, while Bharat Petroleum Corporation Ltd (BPCL) slipped 0.25 percent to Rs 344. Rising global oil prices are seen hurting gross marketing margins of oil marketing companies that buy crude and sell refined fuels.
Meanwhile, upstream oil firms gained. Shares of Oil India rose nearly 3.17 percent to Rs 446, while Oil and Natural Gas Corporation Ltd (ONGC) added 1 percent to end at Rs 244.15. Higher crude prices tend to benefit upstream producers by improving realisations and margins.
Crude oil prices climbed as markets awaited a 'major announcement' from US President Donald Trump related to Russia. Trump had recently voiced support for a Bill proposing 500 percent tariffs on crude imports from Russia. Additional sanctions by the US and a fresh European Union package targeting Russian oil exports are seen as potential supply risks.
Among paint companies, Asian Paints shares declined 1.41 percent to Rs 2,404.80. Berger Paints India and Kansai Nerolac Paints dropped 2.72 percent and 0.10 percent, respectively. The decorative paint industry is raw material-intensive, with crude oil derivatives forming a major input component. Raw material costs account for 55–60 percent of overall expenses, impacting gross margins when crude prices rise.
Tyre manufacturers also felt the pressure. Apollo Tyres closed 1.02 percent lower at Rs 453.90. Shares of CEAT and JK Tyre also ended in the red. Brent crude is a key input in synthetic rubber and petrochemical-based products used in tyre manufacturing.
Higher crude oil prices tend to increase India’s import bill and stoke inflation, affecting broader market sentiment.
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