Asian Paints, Indigo Paints, IOCL, HPCL: Paint, oil marketing stocks tumble up to 9% amid sharp spike in oil prices

Oil prices surged over 25% on Monday, reaching their highest levels since mid-2022, after major producers cut supplies and market fears rose over shipping disruptions due to the expanding U.S.-Israeli war with Iran.

Brent futures rose $24.96 (27%) to $117.65 per barrel, while U.S. WTI increased $25.72 (28.3%) to $116.62, both on track for their largest single-day gains.

WTI surged 31.4% to a session high of $119.48 a barrel earlier on Monday, while Brent rose as much as 29% to $119.50 a barrel. Before the surge on Monday, Brent had already climbed 27% and WTI by 35.6% last week.

Hindustan Petroleum Corporation Ltd (HPCL) tanked 8.67%, Bharat Petroleum Corporation Ltd (BPCL) dropped 8.43%, and Indian Oil Corporation (IOCL) declined 7.29% on the BSE.

Brent crude, the global oil benchmark, surged 24.71% to $112.51 per barrel.

Among paint stocks, Asian Paints fell by 5.12%, Indigo Paints dropped 4.83%, Berger Paints lost 4.80%, and Kansai Nerolac Paints declined 4.72%.

On the NSE too, Asian Paints shares declined over 5%.

The 30-share BSE SENSEX crashed 2,494.35 points, or 3.16%, to 76,424.55 in the morning trade before seeing a mild recovery. The 50-share NSE NIFTY50 tumbled 752.65 points, or 3%, to 23,697.80.

Near-term sentiment remains under pressure amid escalating tensions in the Middle East, which have kept crude oil prices elevated and heightened concerns over inflation risks and India’s rising import bill.

Analysts noted that the sustained surge in energy prices has also revived fears of macroeconomic strain, adding another layer of caution to market positioning.

The US and Israel launched military strikes on Iran on February 28, killing Ayatollah Ali Khamenei, Iran's supreme leader.

Following the military offensive, Iran has carried out a wave of attacks mainly targeting Israeli and American military bases in several Gulf countries, including the UAE, Bahrain, Kuwait, Jordan, and Saudi Arabia.

Rupee hits record low

The Indian rupee plummeted 46 paise to near its all-time intraday low of 92.28 against the US dollar in early trade on Monday as global crude oil prices shot up and the greenback strengthened amid the worsening situation in the Middle East.

Brent crude, the global oil benchmark, was trading higher by a staggering 25.68% at $116.50 per barrel in futures trade as the war between the US, Israel, and Iran intensified.

A big surge in FII outflows and a crash at the domestic equity market in morning trade put further pressure on the local unit, forex traders said.

At the interbank foreign exchange, the rupee opened at 92.22 against the US dollar before declining further to 92.28, down 46 paise from its previous close. The rupee had hit an all-time intra-day low of 92.35 on March 4.

The rupee depreciated 18 paise against the US dollar on Friday to close at 91.82 against the American currency.

"The rupee will remain vulnerable to the rising oil prices, which have risen by more than 28 per cent since the last closure on Friday. Asian currencies were also lower on Monday," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

Rupee might touch 93.00 if oil remains above USD 100 in the coming trading sessions, he added.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.66 per cent higher at 99.64.