Airline stocks fall up to 5% on hike in import duty of jet fuel

Aviation stocks tumbled up to 5 per cent Thursday after the government raised import duty on jet fuel.

Shares of Jet Airways tumbled 4.82 per cent, SpiceJet 1.95 per cent and InterGlobe Aviation 1.27 per cent on BSE.

All these stocks hit their respective 52-week lows during the day.

The government Wednesday raised import duties on 19 items, including jet fuel as it looks to check the widening current account deficit resulting from high crude oil prices and the rupee dipping to a historic low.

The government has announced an import duty of 5 per cent on aviation turbine fuel (ATF). It was nil earlier.

"The 5 per cent basic custom duties (BCD) hike on aviation turbine fuel (ATF) was unanticipated, and could lead to a rise in fuel bill up to 0.5 per cent for carriers such as Indigo," JM Financial Institutional Securities said in a report.