Mumbai: Led by Kingfisher Airlines, shares of aviation companies on Wednesday rallied by as much as 9 per cent in the morning trade amid reports that foreign airlines might soon be allowed to pick up stakes in Indian carriers.
Shares of Kingfisher Airlines soared 8.84 per cent to Rs 20.30 on the BSE.
Similar uptrend was seen in other aviation stocks. Jet Airways was up 6.34 per cent, while SpiceJet gained 6 per cent.
According to reports, the Cabinet is likely to soon take a decision on a proposal to allow foreign airlines to pick up stake in domestic carriers, most of which are facing financial crisis.
The cash-crunched Indian airlines are facing several problems, including rising fuel prices and strong competition.
Currently, India does not permit foreign airlines to buy stake in domestic airlines, although foreign investors are allowed to hold 49 per cent.
Rally in these stocks largely outperformed the weak market, where the BSE benchmark Sensex was trading at 17,129.78, down 114.06 points at 1030 hours.