Oil-sensitive stocks surge as crude tumbles 6%; IndiGo, BPCL, IOCL, IGL, Adani Total Gas lead gains

Shares of crude oil-sensitive sectors, including aviation, oil marketing companies (OMCs), city gas distributors and paint makers, saw broad-based buying on Monday as global crude oil prices tumbled amid signs of easing geopolitical tensions in the Middle East.

The rally followed U.S. President Donald Trump's decision to refrain from launching fresh military strikes on Iran, while signalling the possibility of negotiations with Tehran.

Brent crude plunged more than 6% to $82.41 per barrel, while US West Texas Intermediate (WTI) crude fell 5.4% to $80.10 a barrel, boosting the outlook for sectors that are heavily dependent on crude oil and its derivatives.

The sharp decline in oil prices also lifted broader market sentiment, with the BSE Sensex rising as much as 790 points, or around 1%, in early trade to 78,883.34, while the NSE Nifty 50 gained about 190 points to 24,572.70, tracking firm global cues.

Aviation stocks were among the biggest beneficiaries as aviation turbine fuel (ATF), which accounts for nearly 35-40% of airlines' operating expenses, is directly linked to global crude prices. Shares of InterGlobe Aviation, the parent of IndiGo, surged up to 4.4% to ₹5,400, emerging as top gainer on the Sensex pack. SpiceJet shares also gained around 0.5%, as lower fuel costs are expected to support airlines' margins.

Oil marketing companies also traded higher on expectations of improved refining margins and lower working capital requirements. Indian Oil Corporation gained 2.1%, Bharat Petroleum Corporation rose 1.6%, and Hindustan Petroleum Corporation advanced 1.2%. Among city gas and downstream energy companies, Indraprastha Gas climbed 2.3%, Adani Total Gas added 2.5%, while Petronet LNG edged higher.

The Nifty Oil & Gas index rose 0.3%, although gains were partly capped by weakness in upstream oil producers, which typically benefit from higher crude prices. ONGC fell 0.8% and Oil India declined 1.7% as lower crude prices are expected to weigh on their oil realisations.

Paint stocks, another major beneficiary of lower crude prices owing to their dependence on crude-derived raw materials, also witnessed strong buying interest. Kansai Nerolac rose 3.5%, Akzo Nobel India gained 2.5%, Grasim Industries advanced 1.8%, Berger Paints added nearly 1%, and Asian Paints climbed 0.8%, while Shalimar Paints hit the 20% upper circuit. Indigo Paints, however, bucked the trend and traded in the red.

According to Choice Broking, Brent crude has resumed its downward trajectory amid signs of de-escalation in the US-Iran conflict. The brokerage noted that MCX Crude Oil August futures opened sharply lower at 7,789 and quickly hit the 6% lower circuit during Asian trading. It expects immediate support at 7,456, with a decisive break below this level potentially triggering a further decline towards the 7,300-7,240 zone.

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