Nifty India Tourism down over 3% as PM Modi appeals to avoid foreign travel; IndiGo falls 5%, ITC Hotels slips 3%

The tourism-related stocks came under pressure on Monday, May 11, as Prime Minister Narendra Modi stressed the need to save foreign exchange due to the crisis and urged Indians to curb non-essential foreign travel for one year.

“The growing culture of weddings abroad, travelling abroad, and vacationing abroad is becoming prevalent among the middle class,” Modi said. “We should postpone travelling abroad for at least a year.”

Addressing a public meeting in Hyderabad on Sunday, PM Modi also said India should revive COVID-era practices, such as work-from-home, virtual meetings, and video conferencing, to reduce fuel consumption and imports. He said citizens should place the country's interests first during the current crisis.

Following this, tourism-related stocks were seen trading lower, with the Nifty India Tourism index tumbling 3.2% to an intraday low of 7,337.90 level. For a three-month period, the gauge has lost 10%, while for six months’ time it has slipped 16%. All the 15 stocks on the index were trading in red on Monday.

Shares of IndiGo operator InterGlobe Aviation was the biggest laggard on the index, declining 5%, followed by GMR Airports (-4.13%), TBO Tek (-3.73%), Devyani International (-3.5%), Sapphire Foods India (-3.45%) and ITC Hotels (-2.89%).

Further, Leela Palaces Hotels & Resorts (-2.62%), EIH Limited (-2.36%), The Indian Hotels Company (-2.16%) and Chalet Hotels (-2.15%) were also trading lower. Lemon Tree Hotels (-2.13%), Jubilant Foodworks (-2.08%), BLS International Services (-2.04%), Travel Food Services (-1.93%), and IRCTC (-1.74%) experienced a decline.

Latest forex data

The report also said that in the previous reporting week ended April 24, the overall reserves had declined by $4.82 billion to $698.487 billion.

The kitty had expanded to an all-time high of $728.494 billion during the week ended February 27 this year before the beginning of the Middle East conflict, which led to several weeks of a drop as the rupee came under pressure and the RBI had to intervene in the forex market through dollar sales.

Expressed in dollar terms, the foreign currency assets include the effects of the appreciation or depreciation of non-US units, such as the euro, pound, and yen, held in the foreign exchange reserves.