Shares of two airline companies rose 0.3% to 1% at 14:30 IST on BSE after global crude oil prices declined.
Meanwhile, the S&P BSE Sensex was off 734.68 points or 2.72% at 26,267.54. Global stocks slumped after results from the UK's referendum on its European Union (EU) membership, dubbed "Brexit", showed the country had voted to leave the trading bloc.
SpiceJet (up 1%) and InterGlobe Aviation (up 0.3%) gained. Jet Airways (India) dropped 5.34%. Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
Crude oil futures witnessed selling pressure after Britain chose to leave European Union. Brent for August 2016 settlement was currently off $1.90 per barrel at $49.01 a barrel. The Brent August contract had risen $1.03 a barrel or 2.06% to settle at $50.91 a barrel yesterday, 23 June 2016.
Meanwhile, in the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 67.855, compared with its close of 67.25 during the previous trading session.
A weakness in rupee against the dollar will raise routine expenses for carriers. A weak rupee impacts aviation sector adversely as almost a third of operational expenses of aviation firms are denominated in dollars. Among the payments made in dollars include, rentals of leased aircraft, maintenance, spare parts and salary paid out to foreign crew.
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