Aviation stocks drop after hike in ATF prices

Led by Kingfisher Airlines, shares of airline companies plummeted in morning trade on the BSE after state-owned oil companies hiked jet fuel, or ATF, prices by 1.5% as the falling rupee made oil imports costlier.

Kingfisher Airlines tumbled by 5.75% to an early low of Rs 18.85 on the BSE. Similarly, shares of Jet Airways (India) fell by 3.78% to a 52-week low of Rs 226.10.

SpiceJet, too, plunged by 3% to an early low of Rs 20.60.

Aviation Turbine Fuel (ATF) prices at Delhi's T3 airport were hiked by Rs 899 per kilo-litre (kl), or 1.5%, to Rs 58,578 per kl at midnight on Friday.

IOC and other state retailers, Hindustan Petroleum and Bharat Petroleum, had last raised jet fuel prices by 2.5% on September 16.

ATF makes up for 50% of an airlines' operating cost.

Meanwhile, shares of HPCL were trading higher by 2.85%, BPCL was up 1.73% and IOC gained 0.98% in morning trade.

The fall in aviation stocks was in tandem with the overall weakness in the stock market, with the BSE benchmark Sensex trading lower by 298.47 points at 16,155.29 at 1042 hours.