Paint stocks surge up to 5% as Brent crude prices hit 3-year low; Asian Paints among lead gainers

Stock market today: Indian paint stocks traded higher in Thursday’s session, March 6, mirroring the positive momentum of the market after global crude prices plummeted to a three-year low amid rising crude oil supplies, escalating global trade tensions, spiking U.S crude inventories and reports of China cutting its fuel production.

Dropping crude oil prices would benefit India, which meets 85% of its crude requirements through imports, as well as companies that use crude as a raw material, with the paint sector being one of them. A drop in crude prices will improve paint companies’ gross margins as raw material costs decline, leading to higher profitability and potentially lower product prices for consumers. 

Amid this positive sentiment, shares of Kamdhenu Ventures jumped 5% to ₹11.20 apiece. Asian Paints also climbed 3.1% to ₹2,231 apiece. Berger Paints (India) saw its stock rise 3.6% to ₹501 per share, while Kansai Nerolac Paints and Akzo Nobel India experienced gains of 2.6% and 3.5%, respectively. Similarly, Shalimar Paints spiked 4% to ₹111 in trade.

Brent slips below $70 per barrel; WTI crude drops to $65

Brent plunged 6.5% in the previous four sessions, dropping to its lowest since December 2021 on Wednesday, reaching $68.34 per barrel, while WTI fell 5.8% over the same period to $ 65.22, lowest since May 2023. 

Concerns over a mismatch in demand and supply are leading to a sustained price drop, as OPEC+ agreed to proceed with its previously announced plan to gradually reverse the voluntary output cut of 2.2 million barrels per day (mmbpd) between April 2025 and September 2026, implying a monthly incremental production run rate of approximately 138,000 barrels per day (kbpd).”

OPEC+ attributed the output hike to a positive market outlook, while domestic brokerage firm JM Financial believes the move is primarily driven by pressure from the U.S. President to lower oil prices. Meanwhile, reports also suggest that Kazakhstan’s continued overproduction contributed to the decision. However, OPEC+ has stated that the hike may be paused or reversed depending on market conditions. The OPEC+ output increase is negative for crude oil prices, as it is expected to add to the global oil surplus of approximately 0.5 mmbpd in CY25, compared to a marginal deficit in CY24.

However, the brokerage expects Brent to stabilise around $70 per barrel, as a further decline could hurt U.S. shale oil capital expenditure and lead to a steep rise in Saudi Arabia’s fiscal deficit. As a result, JM Financial has lowered its Brent price assumption to $70 per barrel (from $75) for FY26 and FY27.

Additionally, Trump’s trade measures are threatening to reduce global energy demand and disrupt trade flows in the global oil market. On Tuesday, the U.S. enacted tariffs on Canadian and Mexican goods, including energy imports.

On the other hand, recent data showed that U.S. crude inventories rose more than expected, while gasoline and distillate stocks declined. The Energy Information Administration (EIA) reported that crude inventories increased by 3.6 million barrels to 433.8 million in the past week, exceeding analysts’ expectations.

Furthermore, the decline in crude oil prices has also been affected by escalating trade tensions between the U.S. and China. Analysts believe these tensions could impact China’s economy, the world’s largest consumer of crude oil.

The Trump administration on Tuesday announced that it was ending a license granted in 2022 to U.S. oil producer Chevron, which had allowed the company to operate in Venezuela and export its oil. According to ING commodities strategists, this decision risks reducing supply by 200,000 barrels per day.

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