Shares of InterGlobe Aviation and SpiceJet rose in early trade today after the government allowed airlines to operate with 60 percent capacity in the domestic segment. Reacting to the development, share of SpiceJet opened 5.01% higher at Rs 53.40 against previous close of Rs 50.85 on BSE. The stock touched an intraday high of Rs 53.7, rising 5.6%. It trades higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.
Similarly, share of InterGlobe Aviation gained up to 4.51% at Rs 1304 against previous close of 1,247 on BSE.
Interglobe Aviation share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.
The stock has gained 7.1% in the last 4 days. Scheduled airlines in India will be able to sell seats up to 60% of an aircraft's capacity on domestic flights, up from 45%, the civil aviation ministry said on Wednesday, relaxing restrictions on the sector hit by the Coronavirus pandemic.
It further clarified that other terms and conditions related to domestic flight operations will remain unchanged. Civil Aviation Ministry stated that the decision to further open the skies for domestic airlines was taken after a review of the current status of scheduled flight operations in the country with respect to passenger demand.
Jyoti Roy, DVP- Equity Strategist, Angel Broking said,"While this move is sentimentally positive for airline companies, we believe that demand will remain muted in the near future and is expected to pick up post the festive season. We maintain a neutral rating on the sector. Markets will keenly await data for the domestic aviation industry for August which will be released in a few days by the DGCA."
Meanwhile, Sensex fell 58 points lower to 39,026 and Nifty lost 9 points to 11,526.