Shares of oil marketing companies (OMCs) such as Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) gained in the early trade on Wednesday as the crude oil prices fell over 4 per cent in Tuesday's session. Other beneficiaries of the lower oil prices such as tyre and paint stocks, too, rallied in the trade.
At 09:41 am, the stock of IOCL was trading nearly a per cent higher at Rs 156 apiece on the BSE while HPCL was ruling at Rs 289.40, up over 1 per cent. BPCL was trading at Rs 381, up 0.59 per cent. Among the tyre manufacturers, shares of JK Tyre was quoting a per cent higher at Rs 81 apiece while MRF was trading 0.62 per cent higher at Rs 57,010. Apollo Tyres and Balkrishna Industries were ruling 0.60 per cent and 0.98 per cent higher, respectively.
Scrips of paint companies such as Asian Paints, Kansai Nerolac and Berger Paints moved higher in the range of 0.90 - 1.27 per cent. The paint companies' margin is likely to expand on account of lower raw material prices. Crude oil constitutes nearly half of the raw materials used in the manufacturing of the paint companies.
In comparison, the benchmark S&P BSE Sensex was trading at 39,854 levels, up 0.09 per cent.
Oil prices fell more than 4 per cent on Tuesday, even after OPEC and allies including Russia agreed to extend supply cuts until next March, as weak manufacturing data had investors worried that a slowing global economy could dent oil demand. Brent crude futures fell $2.66, or 4.1 per cent, to settle at $62.40 a barrel. US West Texas Intermediate (WTI) crude futures fell $2.84, or 4.8 per cent, to settle at $56.25 a barrel, after touching their highest in more than five weeks on Monday, said a Reuters report.
On Wednesday, the prices recoverd a bit as extended output cuts by OPEC and its allies helped underpin prices despite growing concerns about weak demand.