Aviation stocks gain on falling oil prices; Jet Airways soars 20% in two days

At 1200 hours, Jet Airways was up 9% to Rs 337 and SpiceJet by 7% at Rs 21 on the BSE.

Shares of airlines companies were trading higher for a second straight day on hopes that the public sector undertaking (PSU) oil marketing companies (OMCs) may cut aviation turbine fuel prices if the current fall in crude oil prices continues.

Jet Airways (India) has rallied 9% to Rs 337, extending its previous day’s over 11% surge on the BSE. The trading volumes on the counter more than doubled, with a combined 4.21 million shares changing hands till 1200 hours on the BSE and NSE.

SpiceJet too gained 7% to Rs 21, extending its previous day’s 3% rise on the BSE. Till noon deals, about 3.8 million shares have already changed hands on the counter as against an average 1.8 million shares that were traded daily in the past two weeks on the BSE.

PSU OMCs review jet fuel prices on the last day of the month based on the average imported oil price in the preceding fortnight.

Fuel costs account for a chunk of airline expenses and the price cut will reduce the financial burden on cash-strapped carriers.

Oil prices tumbled their most in three months on Monday, with US crude falling six per cent, after Greece's rejection of debt bailout terms and China's rolling out of emergency measures to support its stock markets shook global markets, a Reuters report suggests.

US crude has fallen 10% in three straight sessions and Brent over 7% in two consecutive days, the biggest rout since January, the report added. CLICK HERE TO READ FULL REPORT