Mumbai: Aviation stocks on Friday shot up by up to 10 percent amid growing expectations that foreign airlines will soon be allowed to buy stakes in domestic carriers.
SpiceJet soared 10.19 percent to close at Rs 31.35, while Kingfisher Airlines gained 2.33 percent to close at Rs 19.80 on the BSE. Similarly, Jet Airways gained 1.49 percent to Rs 353.75.
The rally in these stocks largely outperformed the weak broader market, where the BSE benchmark Sensex settled 1.37 percent lower at 17,094.51.
Yesterday, aviation stocks had pared early gains and closed with 2-3 percent losses as investors were disappointed that proposal to allow foreign airlines to buy up to 49 percent stake in Indian carriers was again deferred.
Allowing foreign airlines to buy stake in domestic carriers is expected to benefit cash-starved carriers who are servicing huge debts, analysts said.
At present, India allows foreign investors, not related in any way to airline business, to buy up to 49 percent stake in domestic airlines, but foreign carriers are not permitted to invest in them.