Markets showed a strong sectoral rally today following the ceasefire agreement between India and Pakistan, with tourism stocks emerging as the biggest gainers while defence stocks posted modest gains amid de-escalation of the military conflict.
Focusing on tourism and defence, the Nifty India Tourism index surged 5.14 per cent today, making it one of the top-performing sectors as news broke that civil aviation authorities plan to reopen 32 airports that were shut following last week’s armed conflict. The tourism index closed at 8,985.45, up 439.05 points from its previous close.
Among tourism stocks, hotel operator Chalet Hotels led with an 8.03 per cent gain, closing at ₹862.50. IndiGo, India’s largest airline, jumped 7.43 per cent to ₹5,480, reflecting investor optimism about the resumption of flight operations across northern and western India. Indian Hotels Company (INDHOTEL) followed with a 6.70 per cent rise to ₹766.90.
Other notable gainers in the tourism space included BLS International Services up 6.23 per cent, Lemon Tree Hotels rising 5.61 per cent, and DB Realty gaining 5.38 per cent. East India Hotels (EIHOTEL) and GMR Airports Infrastructure also performed well, climbing 5.07 per cent and 4.80 per cent respectively.
The anticipated reopening of 32 airports across northern and western India, including strategic locations like Srinagar and Amritsar, comes as a major relief for the tourism sector that had been hit hard following the suspension of civilian flight operations from May 9 to May 15.
On the defense front, the Nifty India Defence index showed more measured gains, closing 0.51 per cent higher at 7,125.20 points. The relatively modest performance suggests investors are balancing the de-escalation news against the sector’s strong performance over the past month, with the defense index still up 13.08 per cent over the last 30 days.
Within the defence space, Dynamatic Technologies was the top performer with a 5.32 per cent gain to ₹6,701.50, followed by Zen Technologies, which hit the 5 per cent upper circuit to close at ₹1,476.70. Cyient DLM and BEML also posted strong gains of 4.99 per cent and 4.19 per cent respectively.
Data Patterns India continued its strong momentum, rising 4.18 per cent to ₹2,391.10, having already gained 36.46 per cent over the past month. Mishra Dhatu Nigam (MIDHANI) added 3.90 per cent to close at ₹331.30.
However, not all defence stocks participated in the rally. Hindustan Aeronautics Limited (HAL) declined 1.34 per cent to ₹4,441, Solar Industries dropped 1.76 per cent to ₹13,250, and Paras Defence saw a significant correction of 6.01 per cent to close at ₹1,370.80 after its recent sharp rally of nearly 50 per cent over the past month.
Market sentiment appears to be driven by the scheduled meeting between the Director Generals of Military Operations (DGMO) from India and Pakistan aimed at easing geopolitical tensions. The weekend agreement to cease all military operations across land, air, and sea has fostered a risk-on sentiment, particularly benefiting sectors directly impacted by the conflict.
The tourism sector’s strong performance today follows weeks of pressure after the April 22 terrorist attack in Pahalgam that left 26 tourists dead, which was followed by India’s “Operation Sindoor” on May 7 targeting terrorist camps in Pakistan. The ensuing military standoff led to the temporary closure of airports and a significant drop in tourism-related activities.
Trading volumes were substantial across both sectors, with the tourism index recording transactions worth ₹1,958.65 crores while the defense index saw even higher volumes at ₹5,157.04 crores, indicating strong investor interest in these sectors following the geopolitical developments.
As civil aviation authorities prepare to make a formal announcement regarding the resumption of operations at the previously closed airports, investors appear optimistic about a potential recovery in tourism and travel-related businesses that had been adversely affected by the recent tensions.
Published on May 12, 2025
