IndiGo, GMR Airports, SpiceJet, Dreamfolks Services, other aviation stocks jump up to 11%; here's why

Shares of aviation-linked companies recorded strong buying interest in Tuesday's opening trade, led by InterGlobe Aviation Ltd (IndiGo's parent), which surged 10.99 per cent to Rs 4,737.40. SpiceJet Ltd gained 5 per cent to Rs 11.14.

Other aviation counters, such as Dreamfolks Services Ltd, Taneja Aerospace and Aviation Ltd, Global Vectra Helicorp Ltd and GMR Airports Ltd, also traded higher, rising up to 6.23 per cent during the early session.

The rally followed a sharp fall in global crude oil prices. Brent crude futures on the Intercontinental Exchange (ICE) dropped around 16 per cent to hit a low of $91.72 per barrel, compared with the previous close of $109.27, after the United States and Iran agreed to a two-week temporary ceasefire.

A decline in crude oil prices typically lends support to aviation stocks, as hopes of lower fuel costs raise the likelihood of easing operating expenses and improving airlines' profitability outlook.

Oil prices fell as Iranian Minister of Foreign Affairs Seyed Abbas Araghchi said Iran would allow safe passage through the Strait of Hormuz for two weeks, following the request by the US for negotiations based on its 15-point proposal, as well as the announcement by POTUS about acceptance of the general framework of Iran's 10-point proposal as a basis for negotiation.

US President Donald Trump, in a social media post, said he agreed to suspend the bombing and attack on Iran for a period of two weeks.

"This will be a double-sided CEASEFIRE! The reason for doing so is that we have already met and exceeded all military objectives, and are very far along with a definitive Agreement concerning long-term PEACE with Iran, and PEACE in the Middle East. We received a 10-point proposal from Iran, and believe it is a workable basis on which to negotiate," Trump said.

He added that almost all of the various points of past contention have been agreed upon between the US and Iran, but a two-week period will allow the agreement to be finalised and consummated.