Indigo’s stock closed at Rs 1,862.50, down 5.30 per cent on BSE. On the other hand, the stock of Spicejet touched its 52-week low level of Rs 57.70 once a day.
Aviation stocks: Aviation sector shares Indigo (InterGlobe Aviation) and SpiceJet fell on Thursday amid rising crude oil prices. Indigo shares closed at Rs 1,862.50, down 5.30 per cent on BSE. On the other hand, SpiceJet stock touched its 52-week low of Rs 57.70 once a day. Later it fell 0.66 percent and closed at a price of Rs 60.45.
Aviation sector is therefore under pressure
Gaurav Garg, Head of Research, Capital Via Global Research, told Financial Express Online, “As the government has imposed restrictions due to the pandemic, the aviation sector is under pressure due to a reduction in travel demand, as well as rising gasoline prices and negative currency rates. Because of this this sector is getting affected.” In the previous session, Brent crude futures touched $90 a barrel for the first time in seven years due to rising political tensions between Russia and Ukraine.
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Analysts say that apart from rising oil prices, week global sentiment and rising COVID-19 cases in India are also reasons for the fall in aviation stocks. Pavitra Shetty, Co-Founder and Trainer, Tips2Trades, told Financial Express Online, “Week global sentiment, rising COVID cases in India and crude oil near $90 level have led to heavy weakness in airline stocks. Technically all the stocks look weak, but this is a good opportunity to buy InterGlobe Aviation and SpiceJet for the long term.”
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There may be a further decline of 5 percent
State-owned fuel retailers also hiked ATF prices due to the rise in global oil prices, putting airline stocks under pressure. Analysts say aviation stocks may fall further by 5 per cent amid weak markets. Ravi Singh, VP and Head of Research, Share India Securities told Financial Express Online, “The rise in fuel prices has increased the operation cost of the industry. In addition, Omicron’s rising cases and travel restrictions have also hit the aviation industry, leading to further decline in related stocks. Due to the week market sentiment, there may be a further fall of 3-5 per cent in the stocks.
(Article: Surbhi Jain)
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