Defense stocks: After the US attack on Iran’s nuclear bases, where the Indian stock markets fell sharply on 23 June today. On the other hand, there was a strong jump in the shares of defense companies. The Nifty Defense Index climbed 1.7 percent to around 9,037 during business today. The market is hoping that the orders received by defense companies may accelerate amid growing tension in the middle East.
The most boom came in the shares of Idea Forge. The company shared up to a upper circuit of 10% and reached Rs 631.05. In addition, the shares of Zen Technologies and Paras Defense saw a rise of up to 5%. Jane Tech shares put 5 per cent upper circuit and reached close to Rs 1,995. At the same time, Paras Defense shares were trading around 5% to around Rs 1,718.
Apart from these, Astra Microwave Products, Bharat Electronics, Garden Reach Shipbuilders and Engineers and Data Patterns shared more than 2%. Shares of Mazagon Dock Shipbuilders were also trading up about 2% above 2%. India Electronics shares on the Sensex were trading as top gainers.
Cochin Shipyard and DCX India shares saw a rise of more than 1.5%. At the same time, Hindustan Aeronautics, Bharat Dynamics and BEML shares also saw a slight rise. Apart from this trend, shares of Solar Industries closed in red mark with a slight decline.
US President Donald Trump said on Sunday that the US Army had successfully attacked three Iran’s nuclear bases. He claimed that “this military action has been extremely successful and Iran’s major nuclear bases have been completely destroyed.” Trump further stated that the US fired six bunker buster bombs and 30 tomhoc missiles. Trump also warned that further action would be taken if the Iran does not accept the peace agreement. Israeli Prime Minister Benjamin Netanyahu congratulated Trump for this ‘courageous decision’.
Although US officials have said that they do not intend to wage war with Iran, Trump’s warning has increased the stress at the global level.
Defense stocks in India have been in discussion since ‘Operation Sindoor’ in May, when the Indian Army carried out a surgical strike at terrorist bases in Pakistan. Russia-Ukraine Jung and now Israel-Iran stress have also supported the boom in this sector. However, some analysts have expressed concern about the high valuation of these stocks.
Ajit Mishra, SVP of Religare Broking, said, “Defense stocks were accelerated after Operation Sindoor, then profits were observed and now the middle East is showing up again due to tension in the middle East. There is a lot of scope for the growth of this sector in the term. “
However, Mishra also said that “the valuation of many shares has become quite high due to the boom, which can increase fluctuations in the near future. Investors should pay attention to companies with strong order books, better financials and strong examinations. Even though the short term has ups and downs, the long term outlook remains positive for this sector.
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