Share prices of aviation companies soared on Wednesday on reports that the government would this week permit up to 49 per cent foreign direct investment (FDI) in the sector, allowing foreign airlines to pick up stakes in domestic carriers.
The cabinet is expected to take up the issue at a meeting Thursday, sources said.
Shares of Vijay Mallya-led Kingfisher Airlines climbed 6.43 per cent to Rs 19.85. The cash-strapped carrier is seen to be the biggest beneficiary of the government's imminent move.
SpiceJet rallied 5.45 per cent at Rs 29. Jet Airways soared 5.26 per cent to close at Rs 358.50 at the Bombay Stock Exchange.
The aviation stocks rallied bucking the weak overall market trend. The 30-scrip Sensex of the Bombay Stock Exchange (BSE) closed 0.26 per cent down at 17,199.40 points.
The commerce and industry ministry has mooted the proposal to allow up to 49 per cent FDI in the sector, enabling the ailing firms like Kingfisher to raise money from overseas. If approved, it could pave the way for start-up joint ventures.
With IANS inputs