A sharp surge in crude oil prices today (April 29) has sent ripples across Dalal Street. This has dragged key sectors lower and also added pressure on the broader market.
With Brent crude jumping to $125 per barrel mark, the spike has quickly turned into one of the biggest triggers behind today’s market decline.
Benchmark indices have reacted sharply, with the Sensex and Nifty falling around 1.5% in intraday trade.
The reason is simple. India depends heavily on imported crude oil. So, whenever the global oil prices see a surge suddenly, it directly impacts inflation, increases costs for companies, and weakens overall market sentiment.
This time, the trigger is not just demand-supply dynamics but rising geopolitical tension in West Asia, which have raised fears of supply disruptions.
OMCs feel the heat as margins come under pressure
Oil marketing companies are among the first to react negatively when crude prices rise. High crude prices are expected to hit the margins significantly.
Stocks like Hindustan Petroleum Corporation, Indian Oil Corporation and Bharat Petroleum Corporation slipped in the intraday trade today.
In intraday action, HPCL declined around 2%, while IOCL and BPCL were down about 1% each. The reason lies in their business model.
Paint stocks slip as input costs rise
The impact of rising crude oil prices is not limited to energy companies. Sectors like paints and tyres, which rely heavily on crude-based raw materials, also come under pressure.
Companies such as Asian Paints and Indigo Paints have seen their stock prices fall in today’s session.
Asian Paints declined around 1%, while Indigo Paints dropped close to 2%.
For these companies, higher crude prices mean higher raw material costs.
Aviation stocks under pressure as fuel costs jump
The aviation sector is another major casualty of rising crude oil prices. Aviation turbine fuel (ATF), which is derived from crude, is one of the biggest expenses for airlines.
Stocks like InterGlobe Aviation and SpiceJet have seen sharp declines. IndiGo fell nearly 3%, while SpiceJet dropped around 4% in intraday trade.
What’s driving the surge in crude oil prices?
The recent spike in the crude oil price is linked to the ongoing tension involving the United States-Iran.
According to reports, the US has threatened further military action and prolonged blockade of Iran even as the conflict i already disrupted key supply routes.
One of the biggest concerns is the Strait of Hormuz. This is a key shipping route that carries a large portion of the world’s oil supply.
So, whenever there is any disruption here, there will be an immediate impact on global oil prices.
As per the reports of Iran blocking major shipping activity and the US imposing restrictions on Iranian ports, the markets are now pricing in the risk of prolonged supply constraints.
Due to this escalating tension, Brent crude has climbed to its highest levels since 2022.
Conclusion
This surge in crude is seen as a concern for companies where crude linked products are among key raw materials. The crude prices remaining above $120 for extended periods could potentially eat into the margins of the companies and hurt profitability. As a result it is a key factor that the market is watching out for .