Airlines, OMC surge as oil slips

The backdrop of rising US oil inventories and concern over economic slowdown weighed on the oil prices resulting in Brent Crude oil losing most in calendar year 2019. On Thursday, Brent Crude fell nearly 5 per cent and ended at US$ 67.76 per barrel.

However, on Friday, the tension in Middle East and production cut from Organization of the Petroleum Exporting Countries (OPEC) supported the oil prices and was trading at US$ 68.67, up by 1.3 per cent from previous close. In the last one month, the oil prices have been witnessing decline. Besides, the U.S. sanctions on Iran and Venezuela may support oil prices from going further down.

With the sharp fall in oil price, the stocks from aviation and paints sectors have reacted positively as crude forms major share of their overall inputs. Interglobe Aviation was up 5.9 per cent and SpiceJet was 9.7 per cent during the day. Asian Paints was up by 2.2 per cent, Kansai Nerolac was up by 4.2 per cent, Akzo Nobel was up by 2.2 per cent.

Additionally, the oil marketing companies (OMCs) have also benefited from this fall of oil prices. Stocks of Indian Oil Corporation, Hindustan Petroleum Corporation, Bharat Petroleum Corporation surged by 3.5 per cent, 6.6 per cent and 3.6 per cent respectively during the day.