Crude shock rattles aviation, paint, tyre stocks; IndiGo, Asian Paints, JK Tyre, MRF lead fall

Indian equity benchmarks, the Sensex and the Nifty, saw intense selling pressure on Thursday, tumbling by as much as 2.5% in early trade amid a sharp spike in crude oil prices and a hawkish signal from the U.S. Federal Reserve. Snapping a three-session gaining streak, the BSE Sensex plunged as much as 2,019 points, or 2.6%, to an intraday low of 74,685, while the NSE Nifty50 dropped 597 points, or 2.5%, to 23,181.

Brent crude surged past $111 per barrel after Iran struck key energy installations across the Gulf, in retaliation for an earlier Israeli attack on its South Pars gas field. The escalation sent shockwaves through financial markets, reviving fears of supply disruptions and stubborn inflation. US West Texas Intermediate (WTI) also climbed to $98.61, reflecting the broad-based rise in energy prices.

Aviation stocks bore the brunt of the sell-off, as rising fuel costs directly threaten profitability. I nterGlobe Aviation, the parent of IndiGo , dropped over 3%, while SpiceJet also slipped, as investors priced in the likelihood of higher aviation turbine fuel (ATF) costs eating into margins.

Paint companies, which rely heavily on crude-linked derivatives as raw materials, also saw broad-based declines. Sectoral heavyweight Asian Paints  dropped nearly 3% to ₹2,199.45, while Akzo Nobel India fell around 1.5% to ₹2,876.85. Kansai Nerolac Paints and Indigo Paints declined around 1–2%, while Shalimar Paints tumbled over 4% to ₹46.12. Berger Paints India saw marginal losses.

Tyre stocks, which are sensitive to crude-linked input costs such as synthetic rubber, were also under pressure. JK Tyre & Industries  declined more than 3% to ₹423.75, while MRF Limited slipped around 1.3% to ₹1,32,060. Balkrishna Industries and Apollo Tyres also traded lower.

All 30 constituents of the BSE Sensex traded in the red, led by HDFC Bank, which plunged over 8% after its part-time chairman and independent director, Atanu Chakraborty, resigned with immediate effect on Wednesday.

Among other major laggards were Larsen & Toubro, Bajaj Finance, Eternal, IndiGo, and Asian Paints, each declining between 2% and 4%. IT stocks also remained under pressure, with Infosys, Tech Mahindra, and Tata Consultancy Services falling up to 2%. Banking and financial heavyweights, including Axis Bank, ICICI Bank, and Kotak Mahindra Bank, also traded lower, adding to the drag on the indices.

Emkay Global Financial Services in a recent report said that the Nifty50 could decline to around 21,000—around 10% lower from current levels of 23,480—if crude oil prices remain elevated at about $100 per barrel for the next three to four months.

The brokerage flagged a twin impact on corporate earnings from elevated oil prices: demand destruction, both domestically and globally, and margin pressure due to higher input costs. While no sector remains immune, Emkay sees technology, pharmaceuticals, metals and power as relatively better placed, supported by structural demand trends and pricing resilience.

With geopolitical tensions escalating and central banks maintaining a cautious stance, investors appear to be bracing for a period of heightened volatility, where oil, once again, takes centre stage in shaping market direction.

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