On a bullish trend over the past few sessions, aviation stocks gained further on Friday, with SpiceJet hitting a lifetime high of Rs 121.85 before ending the day at Rs 117.50, a gain of 4.49 percent. Jet Airways closed 2.01 percent higher at Rs 533 while IndiGo-owner Interglobe Aviation flared up 3.97 percent intraday before giving up gains to end at Rs 1,116.40.
The rally in aviation stocks was triggered by a signigicant drop in crude oil prices.
"Oil prices fell by as much as a further 3 percent on Friday, after prices had crashed to five-month lows in the previous session, as concerns about global oversupply wiped out all of the price gains since OPEC's move to cut output," IFA Global said in a note on Friday.
The BSE Sensex closed at 29,859, down 267 points while the NSE Nifty shed 75 points to end at 9,285.
Gains in aviation stocks in three months
SpiceJet has gained 85 percent in the past three months (from Rs 64.35 on February 6 to Rs 117.50 on May 5) while Jet Airways has rallied 41.75 percent during the same period (from Rs 376 to Rs 533).
Interglobe Aviation, which owns IndiGO (India's largest in terms of passengers carried), has appreciated 30 percent (from Rs 858 to Rs 1,116).
In comparison, the BSE Sensex has gained 4.98 percent in the past three months, based on its February 6 closing of 28,439.
Coinciding with falling crude oil prices, the fast-appreciating rupee also augurs well for aviation companies, since it leads to a fall in the landed price of aviation fuel in India. The rupee had appreciated 5.84 percent as of April 29 when compared to its January 1 exchange rate of 68.23 to the US dollar.
Friday trading trends
The 267-point fall in Sensex on Friday was attributed to profit-booking by investors, in addition to a 3.84 percent correct in Tata Motors on account of weak Jagual Land Rover sales for April 2017. Other stocks that pulled the index down were ONGC, Axis Bank and GAIL (India).
Stocks close to their all-time high
Despite the weakness in the indices, select stocks rose to trade close to their lifetime highs on Friday. These included Cadila Healthcare, UltraTech Cement, Kotak Mahindra Bank, Indiabulls Housing Finance, Voltas, HDFC Bank, Yes Bank, CESC, MRF, BPCL, GAIL (India) and Apollo Tyres.
Stocks that hit new 52-week hgh
Apart from SpiceJet, other stocks that scaled fresh 52-week high on Friday included Escorts, Federal Bank, Canara Bank, ICICI Bank, Titan, Grasim, South Indian Bank and State Bank of India.
The rally in bank stocks was attributed to the ordinance passed on Friday that gives more powers to the Reserve Bank of India to tackle the menace of rising bad loans. "Markets remained edgy following sharp plunge in oil which also dragged metal stocks lower. Meanwhile, President's nod for NPA ordinance and expectations towards key banking amendments kept investors interested," Anand James, Chief Market Strategist, Geojit Financial Services, said in a note.
The gross non-performing assets of 41 listed banks was pegged at Rs 7.02 lakh crore as of December 31, 2016.
