Mumbi: Jet Airways, the India's biggest listed carrier, dropped the most in over a month as some investors judged recent gains were excessive amid a possible deal with Etihad Airways.
The stock sank 4.6 per cent to Rs529.25 at the close in Mumbai, the steepest decline since October 30, after earlier jumping as much as 7.1 per cent.
Jet Airways surged 57 percent in November, the biggest monthly advance since listing in March 2005. The rally pushed the stock's 14-day relative strength index to 83.4 on November 26, a nine-month high.
The gauge of how rapidly prices rose or fell in the period has stayed above 70 in the last six days, a level some traders use as a signal to sell.
"The stock has moved too high, too fast without any certainty of a deal," Jitendra Panda, head of institutional sales at Future Capital in Mumbai, said by phone. "nvestors have tried to book profits before valuation and terms of the deal emerge."
Jet Airways may raise about Rs16 billion ($290 million) selling a 24 per cent stake to Etihad, an Indian government official, who asked not to be identified citing rules, said on Monday. The airline may seek approval from the Foreign Investment Promotion Board and the deal could conclude by the month-end, the official said.
Ragini Chopra, a spokeswoman at Mumbai-based airline, didn't respond to two calls on her mobile phone yesterday.
Etihad Chief Executive Officer James Hogan said yesterday the carrier is 'continually looking' for long-term prospects and bringing them before the board, with India and China being key regions of focus. The airline is in due diligence with a 'couple' of Indian carriers, he said, without naming.
Carriers in Asia's third-largest economy are considering equity alliances with overseas airlines after Prime Minister Manmohan Singh in September allowed them to sell as much as 49 per cent to foreign operators.