Crude-sensitive stocks including Asian paints, Astral, MRF surged up to 7% in 2 weeks amid sharp drop in oil prices

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Also Read: Oil posts third weekly loss on delayed US Fed cuts; Brent at $79: Buy or sell?Stocks from these sectors have rallied in anticipation that the drop in crude prices will reduce the companies' operating expenses, leading to improved net profits. Investors are optimistic that lower costs for raw materials will enhance profitability, making these sectors more attractive in the market.Tyre Sector: Crude oil derivatives such as carbon black, synthetic rubber, and nylon tyre cord fabric make up nearly half the cost of producing a tyre.

Consequently, fluctuations in crude oil prices directly impact the margins of tyre companies.In response to the recent drop in crude oil prices, shares of tyre companies have reacted positively. Apollo Tyres shares have gained 5%, CEAT shares have risen by 5.10%, Balkrishna Industries shares have surged nearly 7%, and JK Tyre shares have increased by nearly 3%.Also Read: Wall Street week ahead: All eyes on US Fed policy decisions, inflation dataPaints: Paint companies also benefit from falling crude oil prices, as crude oil derivatives are key inputs for paint production.

Approximately 50%–60% of the raw material costs for paint manufacturers are attributable to crude oil and its derivatives.Shares of Asian Paints and Kansai Nerolac Paints have gained 2% and 5% in the last 2 weeks, respectively. Textile Manufacturers: Synthetic textile manufacturers are set to gain from the sharp decline in crude oil prices, which are crucial for producing man-made fiber, yarn, fabric, and textiles.

Also Read: OPEC verdict impact: Oil hits 4-month low despite extended supply cuts till 2025As crude oil prices drop, so do the costs of man-made fiber (MMF), yarn, and fabric. Companies in this sector, such