Asian Paints, other paint stocks rally up to 4% as oil prices post sharpest reversal on Donald Trump’s Middle East war remarks

Shares of Asian Paints, Berger Paints, Akzo Nobel, and a host of other paint companies rallied up to 4% on Tuesday after oil prices tumbled more than $20 per barrel from their intraday peak to slip below $100 a barrel on Tuesday. The decline followed comments from U.S. President Donald Trump that the war involving Iran could end very soon.

The turnaround in Brent prices from Monday’s intraday high of $119.50 per barrel marked the steepest fall from an intraday peak to the closing price for the commodity. Crude prices extended losses on Tuesday morning, falling another 10% to trade below the $90-per-barrel level.

Asian Paints shares soared 4% to their day’s high of Rs 2,303 on the BSE, while Berger Paints was up 1%. Akzo Nobel shares gained 3% to Rs 2,791 apiece. On the flipside, Indigo Paints was trading largely flat.

On Monday, oil prices had surged above $100 a barrel, with Brent hitting a session high of $119.50 and WTI touching $119.48, the highest levels since mid-2022. The spike came amid fears of supply disruptions as Saudi Arabia and other producers cut output during the widening U.S.-Israeli war with Iran.

The development is significant for paint manufacturers because crude oil forms a key raw material base for the industry. Many inputs used in paint production are derived from petroleum products. As a result, lower crude prices could reduce input costs and ease pressure on profit margins.

Also Read | Explained: How Sebi’s new rule allowing mutual funds to hold more gold and silver may impact investors

Before Trump’s latest remarks, Qatar’s energy minister had warned that Gulf energy producers could shut down exports within weeks. In an interview with the Financial Times published last Friday, he said such a scenario could push oil prices to $150 per barrel.
Domestic brokerage JM Financial said that every $1 increase in crude prices raises India’s annual import bill by about $2 billion. Prolonged tensions could lift logistics and marine insurance costs, disrupt shipping routes across the Gulf and widen pressure on the country’s trade balance.
The brokerage also noted that the Indian rupee could face near-term depreciation pressure, prompting potential intervention by the RBI through foreign exchange reserves. Higher crude prices could add to inflation risks, push bond yields higher and compress equity valuation multiples.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)