Airline stocks fell as the Union Government has imposed tariffs on jet fuel imports. Shares of Jet Airways (India) Ltd, InterGlobe Aviation Ltd and SpiceJet Ltd fell 4-6 per cent.
The Union Government had said on Wednesday it is raising the import tariffs on 19 “non-essential items,” including aviation turbine fuel, marking a further tilt toward protectionism as it tries to reduce its widening current account deficit and tackle a sharp slide in the rupee. The Government has imposed 5 per cent Customs duty on jet fuel.
Jet Airways shares fell as much as 5.6 per cent to Rs 181.3, lowest in over six years. InterGlobe Aviation, which operates low-cost airline IndiGo, declined as much as 4.1 per cent to Rs 818, lowest since February 2017. SpiceJet shares hit their lowest since February 2017, dropping as much as 3.9 per cent.
HSBC has cut its price target on SpiceJet to Rs 70 from Rs 100, but maintained its “hold” rating. The brokerage has raised concerns over fuel price hike and rupee depreciation. It said that the launch of airline's freight business could add some pressure on its profitability in the short term.