Oil Marketing Stocks Tumble as Crude Oil Prices Surge Amid Middle East Tensions
OMC Shares Decline Sharply on Margin Pressure Concerns
New Delhi, March 19: Shares of oil marketing companies (OMCs) witnessed a steep decline on Thursday as rising tensions in the Middle East pushed global crude oil prices significantly higher, triggering concerns over profitability.Market participants remained cautious as the surge in crude prices is expected to exert pressure on refining and marketing margins of OMCs, leading to a broad-based sell-off in the sector.
Hindustan Petroleum Corporation Ltd (HPCL) led the losses, with its stock plunging 7.42 per cent to hit a 52-week low of Rs 323.35 on the BSE.
Bharat Petroleum Corporation Ltd (BPCL) shares fell 5.67 per cent to Rs 286.45, while Indian Oil Corporation (IOC) declined 3.70 per cent to Rs 143.
Crude Oil Rally Intensifies Market Volatility
The decline in OMC stocks coincided with a sharp rally in global oil prices. Brent crude, the international benchmark, surged 6.25 per cent to USD 114.1 per barrel, amplifying concerns across equity markets.Higher crude prices typically increase input costs for oil marketing companies, which can compress margins if not passed on to consumers.
Broader Markets Slide After Recent Rally
The weakness in OMC stocks came alongside a broader market sell-off, ending a three-day rally in domestic equities.The BSE Sensex dropped 1,847.05 points, or 2.41 per cent, to 74,857.08 during late afternoon trade. Similarly, the NSE Nifty declined 587.40 points, or 2.47 per cent, to 23,190.40.
Risk-Off Sentiment Grips Global Markets
Market sentiment turned negative amid escalating geopolitical concerns and rising energy prices.Ponmudi R, CEO of Enrich Money, said that Indian equity markets opened sharply lower with a significant gap-down, as increasing crude oil prices and geopolitical tensions led to a strong risk-off sentiment across global markets.
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