OMCs, paint stocks tank up to 4% amid reports of Israel attack on Iran
Upstox
2 min read • Updated: April 19, 2024, 12:49 PM
Summary
Oil prices gained on Friday with global benchmark Brent Crude futures rising more than 2% to $88.9 per barrel level. WTI Crude also raced more than 2% to $84.56 per barrel in the aftermath of latest missile and drone attack on Iran by Israel.
Shares of oil marketing companies and paints manufacturers declined up to 4% on Friday, April 19, as 'a surprise missiles attack' by Israel on Iran fuelled worries about crude oil price hike and supply constraints.
Oil prices gained on Friday with global benchmark Brent Crude futures rising more than 2% to $88.9 per barrel level. WTI Crude also raced more than 2% to $84.56 per barrel in the aftermath of the latest missile and drone attack on Iran by Israel.
Shares of oil marketing companies dropped up to 4% on Friday due to supply concerns. NIFTY Oil & Gas index dropped upto 2% in morning deals before trading 0.92% down at 11,528.45.
Among oil shares, Indian Oil Corp plunged by 4% to a low of ₹162.2 apiece on the NSE. Other PSU oil retailers BPCL and HPCL declined 4% each to a low of ₹564.2 and ₹457.75 per share, respectively.
Reliance Industries dropped 1% dragging the sectoral indices into the red.
Gas shares Gujarat Gas, Adani Total Gas, MGL and IGL also dropped up to 3% on the NSE.
Oil producer ONGC and Oil India Ltd, however recovered from early lows to trade higher up to 1%.
Escalating tensions in the Middle East are expected to drive oil prices higher and also increase the supply costs, hitting margins of oil marketing companies.
Also Read: Brent crude up 4%, crosses $90 a barrel on reports of Israeli missiles hitting Iran’s Isfahan
Paint manufacturers’ shares drop on crude oil price concerns
Paints makers Asian Paints, Berger Paints, Indigo Paints and Shalimar Paints declined up to 3% on Friday.
Crude derivatives account for around 40% of the input cost for paint manufacturers. Higher crude oil prices will increase costs of paints makers and squeeze their margins.
Leading paints maker Asian Paints dropped to a day’s low of ₹2,716.15 before trading lower by 1.15% at ₹2,775.45 apiece on the NSE.
Berger Paints hit a low of ₹500.70. It was trading 1.5% down at ₹507 on NSE at 11.45 am. Indigo Paints was also down 1.27% at ₹1,298.95. Kansai Nerolac and Akzo Nobel also declined up to 1%.
Reports attributing to US officials stated that an Israeli missile hit the central region of Iran on Friday. Flights were suspended over several cities in Iran after the attack.
Last week, Iran fired more than 300 missiles and drones at Israel.