Indian Hotels, ITC Hotels, Sapphire Foods shares soar as NIFTY Tourism index jumps 2%; here’s what is driving the rally

The NIFTY India Tourism index surged as much as 2.07% to hit an intraday high of 7,291.90. At around 12:33 PM, the index was trading 1.98% or 141.65 points higher at 7,285.

All 15 of its constituents advanced during Friday's trading session, amid a broad-based surge in the market.

Tourism sector stocks gained as the Brent crude oil futures fell below the $97 per barrel (bbl) mark on April 10, after Israel said that it plans to begin direct negotiations with Lebanon amid the recent military strikes, as per media reports.

This follows the United States and Iran’s fragile two-week ceasefire deal, which came under pressure as Israel attacked Lebanon, and confusion over Iran’s proposed 10-point framework for negotiations with the US.

Tourism is an oil-intensive sector, with oil dependence arising from its transport element, as well as the requirement for liquefied petroleum gas (LPG). Furthermore, fuel is a huge component of the aviation companies’ expenses. The war in the Middle East has led to significant oil disruptions, with the International Energy Agency (IEA) calling it the “worst energy crisis in history”.

Top gainers of NIFTY India Tourism index

The top winners of the NIFTY India tourism index included Sapphire Foods India (up 4.92%), Devyani International (4.49%), Jubilant Foodworks (3.06%), BLS International Services (2.65%), and Indian Railway Catering And Tourism Corporation (IRCTC) (2.16%).

Tourism stocks in focus

Shares of ITC Hotels gained as much as 2.5% to an intraday high of ₹155.15 apiece on the National Stock Exchange (NSE) on Friday, compared to the closing price of ₹151.37 per equity share.

At the time of writing, it was trading 1.68% higher at ₹153.91 apiece.

On Wednesday, however, the US-based investment firm GQG Partners sold nearly 1.29 crore shares of ITC Hotels for ₹197 crore through an open market transaction.

NRI Rajiv Jain-backed GQG Partners, through its affiliate GQG Partners Emerging Markets Equity Fund, offloaded 1,28,87,559 shares, amounting to a 0.62% stake in ITC Hotels, as per the bulk deal data on the NSE.

The stock of the Indian Hotels Company jumped as much as 2.13% to touch the day’s peak of ₹642.50 per equity share, compared to the closing price of ₹629.10 apiece in the previous session.

It stood at ₹640.35 per unit, marking a 1.79% increase at the time of writing.

In a regulatory filing on April 7, the company said that its portfolio reached 628 hotels, with 373 in operations and a pipeline of 255 hotels.

Shares of Sapphire Foods India rallied as much as 8.92% to hit an intraday high of ₹176.40 apiece on April 10, in comparison to the close of ₹161.95 per equity share on Thursday.

At the time of writing, it was trading 4.97% higher at ₹170 per equity share. While the scrip gained 10% in the past week, it lost 2% over the month. On a year-to-date basis, it has fallen 35%.