AirAsia, Capital A shares surge as oil prices plunge

KUALA LUMPUR: Aviation-related stocks surged in early trade on Thursday as a sharp decline in crude oil prices raised hopes of lower fuel costs for airlines.

AirAsia Group Bhd and Capital A Bhd emerged as Bursa Malaysia's two most actively traded counters, with both recording double-digit gains.

As at 9.30am, AirAsia Group's shares had climbed as much as 20.88 per cent, or 9.5 sen, to 55 sen from Wednesday's close of 45.5 sen.

The stock subsequently eased to 52 sen, still up 14.29 per cent, or 6.5 sen, with more than 26 million shares changing hands.

At that price, the airline's market capitalisation stood at RM1.74 billion.

Meanwhile, its associate Capital A rose as much as 15.22 per cent, or 3.5 sen, to 26.5 sen from Wednesday's close of 23 sen.

At the time of writing, Capital A was trading at 25.5 sen, up 10.87 per cent, or 2.5 sen, with more than 21 million shares traded.

The counter's market capitalisation stood at RM1.14 billion.

The gains came as global oil prices plunged on Wednesday amid growing expectations of a possible end to the US-Israeli war with Iran following the US midterm elections.

Brent crude futures for January delivery fell US$8.98, or 8.7 per cent, to settle at US$94.62 a barrel on the ICE Futures Europe exchange.

Lower oil prices could ease fuel costs for airlines, potentially improving their operating margins.