Nifty Defence Index Climbs to New High with GRSE at the Forefront - Click to Know More!

Peer shipbuilding company Cochin Shipyard also gained nearly 5 per cent, while Zen Technologies and Paras Defence rose by more than 2 per cent each.

Defence sector stocks extended their winning streak on June 4, with the Nifty India Defence index gaining over 2 per cent for the third consecutive session making new fresh all-time high. This rise came despite an otherwise subdued market environment, driven by strong buying interest in key defence names.

Shares of defence equipment manufacturers have been witnessing a notable rally over the past few weeks, buoyed by growing geopolitical tensions that have increased the visibility of future defence orders. The combined market capitalisation of companies within the Nifty India Defence index surged by approximately Rs 9,000 crore this week alone. Since May 21, the index has ended in the green in 10 out of 11 trading sessions, adding Rs 48,700 crore in value during that period.

Garden Reach Shipbuilders & Engineers (GRSE) emerged as the top gainer on June 4, jumping over 7 per cent to hit an all-time high. The surge followed the announcement of a memorandum of understanding (MoU) signed with Norway’s Kongsberg for building India’s first-ever polar research vessel (PRV), which boosted investor sentiment. Peer shipbuilding company Cochin Shipyard also gained nearly 5 per cent, while Zen Technologies and Paras Defence rose by more than 2 per cent each.

Other stocks in the sector such as Mishra Dhatu Nigam (Midhani), BEML, and Mazagon Dock Shipbuilders advanced by over 1.4 per cent. DCX Systems saw a rise of nearly 1.3 per cent, and Bharat Dynamics (BDL) and Astra Microwave Products also remained in the green, albeit with marginal gains.

However, not all stocks followed the rally. Bharat Electronics (BEL), Data Patterns, and a few others closed in the red with minor losses. Hindustan Aeronautics Ltd (HAL) declined over 1 per cent amid concerns surrounding potential delays in the supply of GE-F404 engines for the Tejas MK2 aircraft, partly attributed to US President Donald Trump’s renewed ‘America First’ policy.

The broader surge in defence shares followed reports of India’s armed forces executing strategic strikes on terrorist camps located in Pakistan and Pakistan-Occupied-Kashmir (PoK) under the codename ‘Operation Sindoor’. This operation, along with rising global conflict zones, has sparked expectations of accelerated defence procurement.

Internationally, the Russia-Ukraine war has re-escalated sharply. On May 31, Russia launched 472 drones and seven missiles toward Ukraine—marking the largest drone assault since the conflict began. In response, Ukraine retaliated on June 1 by targeting military airbases inside Russia, allegedly destroying over 40 warplanes. These events unfolded just before scheduled peace talks in Istanbul.

Tensions between Iran and the US also resurfaced, as the UN nuclear watchdog reported that Iran has increased its stockpile of enriched uranium. The International Atomic Energy Agency (IAEA) noted that Iran now possesses over 400 kg of uranium enriched to 60 per cent purity—approaching the weapons-grade level of 90 per cent. Talks have resumed, with President Trump proposing terms for a new nuclear agreement.

Amid this elevated geopolitical climate, investors are betting on increased defence expenditure both in India and globally. 

Disclaimer: The article is for informational purposes only and not investment advice.