Airline shares, including SpiceJet, jumped on Wednesday after a newspaper reported the government is preparing measures to potentially allow foreign investment in the sector.
The daily newspaper cited a senior government official saying measures on foreign direct investment, including possibly in multi-brand retail, could come after Friday's cabinet meeting.
SpiceJet shares rose as much as 6.3 percent, while Kingfisher rose 3.3 percent, and Jet Airways gained 2.8 percent.
Under current rules, foreign airlines are barred from buying stakes in domestic carriers, although foreign investors are allowed to hold a cumulative 49 percent.
Copyright Thomson Reuters 2012