Aviation stocks nosedive, hospital shares soar amid HMPV concerns

News of three confirmed cases of Human Metapneumovirus (HMPV) in India rattled aviation stocks on Monday. Shares of Interglobe Aviation (IndiGo) and SpiceJet nosedived by 5.6 per cent and 4.6 per cent, respectively, as jittery investors feared a return to COVID-style travel restrictions that once crippled the industry.

"The market reaction is a knee-jerk response to the news of HMPV cases," said G Chokkalingam, Founder & Head of Research at Equinomics Research. "It's too early to panic as we’ve seen markets recover after initial setbacks during COVID waves."

Hospitality stocks face turbulence

The hospitality sector also bore the brunt, with The Indian Hotels Company (IHCL), Lemon Tree Hotels, and EIH dropping over 6 per cent. Mid-cap players like Advani Hotels and Juniper Hotels also fell by 5 per cent and 5.6 per cent, respectively.

The sentiment reflects fears of reduced travel and occupancy rates, a scenario reminiscent of the pandemic-induced downturn. However, experts believe any prolonged impact will depend on the virus's severity and containment measures.

Hospitals ride the wave of optimism

While travel stocks sank, hospital shares surged. Bengaluru-based Narayana Hrudayalaya climbed 3.4 per cent to Rs 1,355, and Rainbow Children’s Medicare gained 4 per cent in intraday trade. Other notable gainers included Apollo Hospitals and Krishna Institute of Medical Sciences (KIMS), up by 2 per cent.

The surge in hospital stocks mirrors expectations of increased healthcare demand. "Hospitals are likely to benefit in the short term as the healthcare system gears up to address potential outbreaks," noted a healthcare analyst.

Government’s stance offers reassurance

The Union Health Ministry confirmed two HMPV cases in Karnataka and one in Gujarat, emphasizing that the virus is already in circulation globally. "There is no unusual surge in Influenza-Like Illness (ILI) or Severe Acute Respiratory Illness (SARI)," the ministry stated, adding that India’s preparedness is robust.

Market outlook: Too early to call it a crisis

Chokkalingam highlighted that unless HMPV results in high fatalities and mobility restrictions, the fear-driven sell-off will likely fade. "If necessary, vaccines can be fast-tracked with corporate and government collaboration," he added.

For now, the market remains divided, with panic selling hitting aviation and hospitality stocks, while healthcare stocks reap short-term gains.