Shares of airline companies IndiGo and SpiceJet gained up to 4 percent on Tuesday as crude oil prices declined following a ceasefire between Iran and Israel.
The global benchmark Brent crude fell 2.6 percent to USD 69.62 per barrel, leading to broad-based gains in crude oil-sensitive sectors including aviation, oil marketing companies, among others.
Shares of InterGlobe Aviation, which operates IndiGo, rose as much as 4.27 percent to an intraday high of Rs 5,700.5 on the NSE. The stock had opened higher by 3.01 percent. SpiceJet shares also advanced, rising 2.42 percent to Rs 41.92 apiece around 2 pm.
A fall in crude oil prices is positive for airlines as it reduces the cost of aviation turbine fuel (ATF), which forms a major part of their operating expenses.
Oil marketing companies also saw strong buying. Hindustan Petroleum Corporation Ltd (HPCL) jumped 5.26 percent, Bharat Petroleum Corporation Ltd (BPCL) climbed 4.59 percent and Indian Oil Corporation (IOC) gained 3.89 percent on the BSE.
Paint companies, which use crude derivatives in their manufacturing process, also traded higher. Kansai Nerolac Paints gained 2.19 percent, Asian Paints added 2 percent, Indigo Paints rose 1.88 percent and Berger Paints was up 1.69 percent.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "The dramatic developments in West Asia culminating in US President Trump’s announcement of a ceasefire indicate that the worst of the conflict is over."
Shares of other sectors sensitive to crude prices are expected to remain in focus depending on further geopolitical developments.
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