OMCs, aviation, tyre and paint stocks rise as crude oil prices fall
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Mumbai: Shares of oil marketing companies, local airlines, tyre firms and paint companies were trading higher on Tuesday, after international crude oil prices fell.
Overnight, oil prices suffered their biggest selloff in five months, falling as much as 8% as Greece’s rejection of debt bailout terms and China’s stock market woes set off a deepening spiral of losses, Reuters reported.
Lower crude oil prices will decrease under-recoveries of public sector oil marketing companies on domestic sale of liquefied petroleum gases and kerosene at government-controlled prices.
Hindustan Petroleum Corp. Ltd rose 2% to Rs.815, Bharat Petroleum Corp. Ltd rose 1.3% to Rs.933.20, Indian Oil Corp. Ltd went up 1.5% to Rs.432 and Castrol India Ltd rose 3.4% to Rs.458.20.
Airline shares were trading higher on the hope that falling crude prices may lead to another cut in jet fuel prices. Declining international oil prices have made imports cheaper, resulting in price reduction. Jet fuel constitutes more than 40% of an airline’s operating costs and the price cut will ease the financial burden of cash-strapped carriers.
India’s second largest airline by passengers carried Jet Airways (India) Ltd rose as much as 7.4% to Rs.331.80, while low-fare airline SpiceJet Ltd rose as much as 5.6% to Rs.20.75.
Domestic tyre and paint companies gained. While tyre companies use a lot of crude intermediates, paint companies use crude derivatives, and hence falling oil prices reduce their input costs.
Tyre companies like Apollo Tyres Ltd rose 3.8% to Rs.178.70, Ceat Ltd rose 2.2% to Rs.715.10 and MRF Ltd rose 2% to Rs.35,450.
Paint companies such as Asian Paints rose 3.1% to Rs.808, Kansai Nerolac Paints Ltd rose 5.4% to Rs.244.50, Berger Paints India Ltd went up 3.7% to Rs.214.50, Shalimar Paints Ltd rose 3.8% to Rs.131.90 and Akzo Nobel India Ltd went up 2.6% to Rs.1,300.