Oil retailers, aviation stocks fall 2-6% but ONGC up 4% on sharp rise in crude prices
Any rise in crude oil prices is always bad for oil retailers as well as aviation companies because the cost will go up but oil exploration companies always benefit from the same as they gain more income.
Moneycontrol News
Oil marketing companies as well as aviation stocks declined 2-6 percent intraday Tuesday, following sharp rally in crude oil prices in international markets in previous session. However, share prices of oil exploration companies gained more than 4 percent.
Any rise in crude oil prices is always bad for oil retailers as well as aviation companies because the cost goes up but oil exploration companies always benefit from the same as it means more income.
In fact, the upside is also bad for India because the country meets 70-80 percent of its oil demand through imports.
"Any surprise in price uptick in crude oil shall be detrimental for Indian markets," Shashank Khade, Director and Co-founder, Entrust Family Office Investment Advisors said.
Brent crude oil prices hit a 26-month high on Tuesday, supported by Turkey's threat to cut crude flows from Iraq's Kurdistan region to the outside world.
London Brent crude for November delivery hit an intraday high of USD 59.49 per barrel, the highest level since July 10, 2015. In previous session, it settled with a 3.8 percent gains.
At 11:26 hours IST, Indian Oil Corporation was down 1.82 percent at Rs 391.75, Hindustan Petroleum Corporation down 3.82 percent at Rs 409.05 and Bharat Petroleum Corporation down 4.01 percent at Rs 467.70 per share.
Jet Airways was down 3.04 percent at Rs 483, SpiceJet down 3.11 percent at Rs 138.80 and InterGlobe Aviation down 0.78 percent at Rs 1,037.95 while ONGC declined 4.29 percent at Rs 171.50 and Oil India down 3.74 percent at Rs 343.60.
