Oil marketing companies (OMCs) experienced a significant rally on Dalal Street, with shares gaining nearly 8 per cent as crude oil prices softened dramatically. According to reports from The Economic Times, Hindustan Petroleum Corporation (HPCL) led the gains, rising 6.8 per cent to ₹391 around 11:12 AM. Bharat Petroleum Corporation (BPCL) shares gained 5.9 per cent to ₹322, while Indian Oil Corporation (IOCL) fell 3.5 per cent to ₹147. The rally was driven by crude oil prices cooling near $90 per barrel from recent highs, boosting investor sentiment across crude-sensitive sectors. As per The Economic Times, Brent crude futures slipped below the $95-per-barrel mark to trade under $94, while WTI crude futures fell below $87 on Thursday morning. On Thursday, November 5, at around 11:35 a.m., Hindustan Petroleum Corporation (HPCL) shares surged 6.21% to ₹389.10, while Bharat Petroleum Corporation (BPCL) gained 3.51% to ₹315.40 on the NSE, with Indian Oil Corporation (IOC) advancing 2.98% to ₹146.26. The latest developments show crude oil prices plunged nearly 10%, falling below $100 per barrel after weeks, with Brent crude futures now trading under $94 and WTI crude futures below $87. According to CNBC TV18, shares of state-run oil marketing companies (OMCs), including HPCL, BPCL and IOC, gained around 5% in Thursday's trade as global crude oil prices plunged more than 8% overnight, falling below the $100-a-barrel mark.
The sharp decline in crude prices came amid a major setback for US President Donald Trump, whose Republican Party lost control of both houses of Congress in the midterm elections. According to The Economic Times, Trump's midterm setback added to the positive market sentiment, with investors cheering the prospect of lower input costs for various sectors. MRF shares rallied more than 4%, with each share gaining ₹4,995 to trade at ₹1.23 lakh apiece, while Apollo Tyres and Balkrishna Industries shares jumped more than 8%. The market reaction suggests that Trump's political challenges could lead to more favorable conditions for crude-sensitive sectors, as investors anticipate potential policy changes affecting oil markets. Oil prices have declined amid expectations of the US-Iran war coming to an end, with the Republican Party losing the US Midterm elections. Investors are anticipating that reduced geopolitical tensions could help restore disrupted oil supplies from the Middle East, with shipments through the Strait of Hormuz have nearly returned to pre-war levels.
The aviation sector emerged as a key beneficiary of the crude price decline, with InterGlobe Aviation, the parent of IndiGo, gaining nearly 7 per cent to ₹5,489. According to The Economic Times, the aviation sector is highly sensitive to oil prices because Aviation Turbine Fuel (ATF) accounts for more than 40 per cent of an airline's operating costs. In a recent note, Jefferies noted that Indian airlines are highly sensitive to crude oil prices and forex movements, with ATF accounting for 35-45 per cent of an Indian carrier's CASK. The brokerage added that any dollar-rupee moderation could provide further relief for dollar-denominated expenses including aircraft leases and maintenance costs. The latest rally shows oil marketing companies, including Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL) and Indian Oil Corporation (IOC) saw their share prices jump up to 7%, with the aviation sector benefiting significantly from the sharp decline in crude prices lifting sentiment towards companies that use oil as a key raw material. As per CNBC TV18, InterGlobe Aviation climbed 5.04% to ₹5,400 in Thursday's trading, while SpiceJet also advanced 1.83% to ₹7.78, reflecting the positive impact of lower fuel costs on airline operations.
Paint and tyre stocks also participated in the rally, with Asian Paints up over 4 per cent to ₹2,513 and Kansai Nerolac Paints rising 3.7 per cent to ₹202. As reported by The Economic Times, CEAT gained 2.97 per cent at ₹3,516 and Apollo Tyres gained nearly 5 per cent in Thursday's trading session. The gains across these sectors reflect the broader positive sentiment from cooling crude oil prices affecting input costs for manufacturing and transportation companies. MRF shares rallied more than 4%, with each share gaining ₹4,995 to trade at ₹1.23 lakh apiece, while Apollo Tyres and Balkrishna Industries shares jumped more than 8%. Investors also cheered the prospect of lower input costs for paint and tyre makers, with the sharp decline in crude prices raising hopes of easing input and fuel costs across these sectors. According to CNBC TV18, JK Tyre surged 5.6% to ₹351.50 in early trade, while Apollo Tyres gained 4.37% to ₹420, and CEAT rose 3.25% to ₹3,526. Kansai Nerolac Paints advanced 2.84% at ₹200.86, and Berger Paints gained 2.75% to ₹498.45.
According to Vipin Kumar, AVP research at Globe Capital Market, OMCs are witnessing a sharp surge in prices amid cooling crude oil prices and are heading towards their respective price resistances. As reported by Business Standard, BPCL has immediate resistance in the ₹325–330 spot range, HPCL around ₹400, and IOC around ₹148 levels. Kumar noted that cooling crude oil prices are a big relief for the Indian OMCs, with a decisive break above these resistances potentially leading to further upside in the near term. Reuters quoted June Goh, senior oil analyst at Sparta Commodities, stating that "markets are assessing the impact of the midterm elections to Donald Trump's next steps with the Iran war, pricing in more likelihood for the war to end." A decline in international crude oil prices can benefit IOC, BPCL, and HPCL by reducing their crude procurement costs, improving their fuel marketing margins, provided domestic petrol and diesel retail prices remain unchanged. However, the extent of the benefit will depend on the movement in refined fuel prices, refining margins, and retail selling prices. Upstream oil producers remained under pressure amid the decline in crude prices, with Oil India falling 3.07% to ₹443.95 and ONGC slipping 1.60% to ₹231.24.
