Shares of airline, tyre and paint companies declined by as much as 8 per cent on Monday after crude oil prices surged beyond $110 per barrel amid escalating geopolitical tensions in West Asia, triggering a broad sell-off in oil-sensitive sectors.
Among airline stocks, shares of InterGlobe Aviation, the operator of IndiGo, and SpiceJet dropped as much as 6.6 per cent and 5 per cent, respectively. At 10:24 am, InterGlobe Aviation was trading at ₹4,114 apiece while SpiceJet was trading at ₹13.29 a piece.
In broader markets, the sell-off on Monday was steeper, with both the main indices, the Sensex and the Nifty, down nearly 2,000 points and 666 points respectively, slipping 2.7 per cent.
Paint companies also came under pressure, with Asian Paints declining 5 per cent, Berger Paints falling 4.3 per cent, and Indigo Paints slipping 5.6 per cent. Tyre manufacturers recorded similar losses, with JK Tyre & Industries down 8.2 per cent, Apollo Tyres down 4.9 per cent, Tolins Tyres down 4.5 per cent, and MRF down 3 per cent.
The sharp fall in these stocks follows a surge in global crude oil prices, which are a major input cost for airlines, tyre makers and paint manufacturers. Analysts noted that airlines may seek to pass some of the higher fuel costs on to customers through fare increases.
Brent crude climbed to its highest level since 2022, rising as much as 28.9 per cent to $119.5 per barrel. West Texas Intermediate (WTI), the US benchmark crude, was trading at $113.4 per barrel, up 24.7 per cent from Friday’s close.
Oil prices have risen sharply since the US and Israel launched attacks on Iran on March 1, escalating tensions in the region and unsettling global financial markets amid fears of higher inflation. Last week alone, US crude prices jumped about 35 per cent while Brent crude gained around 28 per cent. On a year-to-date basis, WTI and Brent crude have surged 98 per cent and 88 per cent, respectively.
Reports also indicated that Iraq, Kuwait and the UAE have reduced oil production as storage facilities fill up due to constraints on crude exports. In addition, oil and gas facilities across Iran, Israel and the US have been targeted since the conflict began, intensifying concerns about potential supply disruptions.
