Shares of airline companies climbed by up to 7.40 per cent on the BSE on Friday driven by smart buying by investors amid hopes of opening of foreign direct investment (FDI) in the sector.

The surge was led by low fare carrier Spicejet, which gained 7.40 per cent to settle at Rs 39.90 on the Bombay Stock Exchange (BSE). In intraday session, the stock had surged by 8.2 per cent to a high of Rs 40.20. In the last trading session the stock had slipped to its year low of Rs 36.15.

Market experts attributed the rise in the aviation stocks to media reports about relaxation of FDI norms in the sector by the government.

“There is an increased feeling among the investors that the Finance Ministry is going to talk about FDI in aviation sector, which has a dearth of capital,” Unicon Financial Services CEO, Mr Gajendra Nagpal, said.

Though FDI up to 49 per cent is allowed in aviation sector, foreign airlines cannot pick up stake, even indirectly.

Further, other airline stocks like Jet Airways and Kingfisher Airlines too ended the day in the positive terrain, while the former rose by 5.91 per cent the latter ended with a gain of 3.37 per cent.

In the previous trade both these stocks had fallen to their 52-week low.

Meanwhile, after a choppy trade, the BSE 30-share benchmark index Sensex ended with a gain of 68.50 points at 17,700.91.

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