Three aviation stocks rose by 1.04% to 4.84% at 10:15 IST on BSE after crude oil prices eased and rupee strengthened against the dollar.
SpiceJet (up 4.84%), Kingfisher Airlines (up 4.35%) and Jet Airways (India) (up 1.04%), edged higher.
The BSE Sensex was up 235.69 points, or 1.15% at 20,651.20.
US crude oil futures hovered near their lowest level in more than three months on Friday, 18 October 2013. Light sweet crude oil for November delivery was up 12 cents at $100.79 a barrel on the New York Mercantile Exchange. The contract touched a session low of $100.03 on Thursday, its weakest since 3 July 2013.
Aviation turbine fuel (ATF) or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.
Meanwhile, a strength in rupee also boosted aviation stocks. In the foreign exchange market, the rupee firmed against the dollar. The partially convertible rupee was hovering at 60.96, stronger than its close of 61.23 on Thursday, 17 October 2013.
A strong rupee augurs well of the aviation sector 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. The rupee had hit its record closing low of 68.80 on 28 August 2013.
Powered by Capital Market - Live News
