US-Iran peace deal boosts tourism stocks: Nifty India Tourism hits 3-month high; IndiGo, Leela Palaces lead gains

Shares of the tourism-related firms were trading higher on Monday, June 15, with the Nifty India Tourism index touching a three-month high level after the US and Iran reached a peace deal.

On Sunday, US President Donald Trump declared that a peace deal with Iran had been completed and said he was authorising the reopening of the Strait of Hormuz and the removal of a US naval blockade. The announcement followed months of conflict that began on February 28 when Israel, along with the United States, launched military operations against Iran.

Following the update, the tourism stocks, including hotel, airline, and airport stocks, were in the green. The Nifty India Tourism gained 3.3% to its three-month high level of 7,691.05. The index tracks the performance of stocks in the Nifty 500 Index, which represents travel and tourism.

All the 15 stocks on the gauge were trading higher. For a month’s period, the Nifty India Tourism index has rallied 6%, while on a year-on-year basis, it has tumbled 13%.

Leela Palaces Hotels & Resorts was the most contributing stock on the index, rising 8.7%, followed by TBO Tek (8.6%), Travel Food Services (6.3%), Sapphire Foods India (5.4%) and IndiGo operator InterGlobe Aviation (4.7%).

Furthermore, Devyani International (4.1%), Lemon Tree Hotels (4.04%), and EIH Limited (3.3%) jumped 2.9% each at the time of writing the article. Stocks of Chalet Hotels (2.64%), GMR Airports (2.42%), The Indian Hotels Company (2.32%), BLS International (2.25%) and IRCTC (0.35%) also surged.

Shares of luggage companies like VIP Industries and Safari Industries climbed 3.2% and 6%, respectively. Airline stock SpiceJet jumped as much as 8.3% to touch an intraday high of ₹13.38 apiece.

Last month, Prime Minister Narendra Modi had stressed the need to save foreign exchange due to the crisis and urged Indians to curb non-essential foreign travel for one year. Addressing a public meeting, PM Modi had 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.

On Monday, the rupee advanced 58 paise against the US dollar to 94.60 in early trade as global crude oil prices dropped sharply after the deal to end the war.