Shares of InterGlobe Aviation, the parent company of IndiGo, jumped 3.5 percent on Tuesday to Rs 5,092, emerging as the top gainer on the Nifty 50, as a sharp decline in global crude oil prices boosted sentiment towards airline stocks. The stock extended its winning streak to a third consecutive session, gaining 8.9 percent over the period.
The rally came after Brent crude prices plunged more than 7 percent on Monday, following signals from the US and Iran that they were willing to pursue peace talks. Lower crude oil prices are particularly significant for airlines, given the substantial contribution of aviation turbine fuel (ATF) to their operating costs.
Brent crude futures settled $8.66, or 7.63 percent, lower at $104.77 a barrel on Monday. Prices held relatively steady near $104.70 a barrel on Tuesday.
The sharp decline in oil prices comes at a time when IndiGo has been grappling with elevated fuel costs, even as strong passenger yields and pricing power have helped the airline offset some of the pressure on profitability. At Rs 5,092, IndiGo had a market capitalisation of approximately Rs 1.97 lakh crore. The stock was down 0.4 percent year-to-date.
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