 "Paint, tyre, aviation stocks gain due to fall in crude oil prices")
Shares of aviation, tyre and paint manufacturing companies were trading higher by up to 11% on the BSE in early morning trade on Friday due to a fall in crude oil prices.
Asian Paints, Berger Paints, Shalimar Paints, Kansai Nerolac Paints, JK Tyre, SpiceJet, Jet Airways and Ceat were trading higher more than 4% as the extension of a low oil price scenario augurs well for their crude-related raw material expenses. In comparison, the S&P BSE Sensex was up 1.4% at 34,918 points at 10:10 AM.
Most the companies from these sectors, thus far reported their September quarter earnings, have posted a weak set of numbers due to a significant increase in input costs led by rupee depreciation and higher crude prices, which impacted the net profit.
Brent and US crude posted their biggest monthly percentage decline since July 2016 in October, with Brent down 8.8% for the month and US crude losing nearly 11%.
Oil prices fell on Thursday to extend losses from the previous session, pressured by signs of rising supply and by growing concerns that demand may weaken on the prospect of a global economic slowdown, a Reuters report suggested. CLICK HERE TO READ FULL REPORT
Meanwhile, according to a PTI report, India is close to a deal with the US that will allow it to continue buying crude oil from Iran without attracting any sanction after it agreed to cut imports and escrow payments, CLICK HERE TO READ FULL REPORT
A fall in crude oil prices helps improve margins of paint companies, as half of the raw material in paints is dependent on crude oil. The airline companies benefit from the fall in the price of aviation turbine fuel (ATF), which constitutes their main expense.
Asian Paints, Berger Paints, Shalimar Paints, Kansai Nerolac Paints, JK Tyre, SpiceJet, Jet Airways and Ceat were trading higher more than 4% as the extension of a low oil price scenario augurs well for their crude-related raw material expenses. In comparison, the S&P BSE Sensex was up 1.4% at 34,918 points at 10:10 AM.
Most the companies from these sectors, thus far reported their September quarter earnings, have posted a weak set of numbers due to a significant increase in input costs led by rupee depreciation and higher crude prices, which impacted the net profit.
Brent and US crude posted their biggest monthly percentage decline since July 2016 in October, with Brent down 8.8% for the month and US crude losing nearly 11%.
Oil prices fell on Thursday to extend losses from the previous session, pressured by signs of rising supply and by growing concerns that demand may weaken on the prospect of a global economic slowdown, a Reuters report suggested. CLICK HERE TO READ FULL REPORT
Meanwhile, according to a PTI report, India is close to a deal with the US that will allow it to continue buying crude oil from Iran without attracting any sanction after it agreed to cut imports and escrow payments, CLICK HERE TO READ FULL REPORT
A fall in crude oil prices helps improve margins of paint companies, as half of the raw material in paints is dependent on crude oil. The airline companies benefit from the fall in the price of aviation turbine fuel (ATF), which constitutes their main expense.
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