Warren Buffett’s $10-b Play on US Airlines Lifts Indian Aviation Stocks
Mumbai: Shares of domestic airline companies soared on Monday as global investor Warren Buffettled Berkshire Hathaway’s $10 billion investments in four US airlines in the past few months boosted sentiment in the stocks. On Monday, Jet Airways rose 5.4% to ₹ 445, SpiceJet jumped 6.7% to ₹ 76 and I n d i g o a i rl i n e ’ s p a r e n t InterGlobe Aviation gained 3% to ₹ 863.7.
“We are seeing a spillover effect due to the Warren Buffett effect after he stated that he has bought airline stocks in the US. Also, market expects oil to be range bound in the $55-60 (per barrel) band,” said Sanjiv Bhasin, executive VPmarket and corporate affairs at IIFL. However, this could also mean that investors are running out of fresh ideas with midcap indices nearing record levels and playing up these stocks for short-term momentum.
“Market is at a point where Nifty is near 9000 and airline sector was one such sector, which had not done much recently,” said Bhasin.
In the last one week, SpiceJet has gained the most among aviation stocks by 17% followed by Jet Airways, which has surged 16%. InterGlobe Aviation has gained the least, by 4.7%, which analysts said is because it is at a PE of 17.5 times, more expensive than Jet Airways and SpiceJet, which are trading at a PE of 6.7 times and 9.9 times, respectively. HIGHS & LOWS