HAL, Cochin Shipyard: Defence stocks plunge amid rising geopolitical tensions, NIFTY Defence index declines over 4%

Shares of defence equipment makers edged sharply lower in trade on Friday, April 25, amid rising geopolitical tensions between India and Pakistan in the aftermath of Pahalgam terrorist attack in which 26 innocent tourists were killed on April 22. The NIFTY India Defence index declined as much as 4.13% and all the 18 stocks in the index were trading lower.

Garden Reach Shipbuilders and Engineers was top loser in the NIFTY India Defence index, the stock fell 7.47% to ₹1,600. DCX Systems (-7.18%), Unimech Aerospace and Manufacturing (-6.08%), Cyient DLM (-5.60%), Zen Technologies (-4.76%), Cochin Shipyard (-4.75%) and Mazagon Dock (-4.70%) were also among the top losers in the defence space.

Meanwhile, the Indian Navy’s latest guided missile destroyer INS Surat fired a Medium Range Surface to Air Missile (MRSAM) against a ‘sea skimming’ target in the Western Indian Ocean. This came just before Pakistan issued a ‘Nav area’ warning for live firing in the Arabian Sea spread over a vast area parallel to a major portion of its coastline and Exclusive Economic Zone (EEZ).

Among the other measures taken by the government of India include suspending Indus Water Treaty, revoking visa of Pakistani nationals, reducing staff at Pakistan High Commission in New Delhi and suspension of ceremonial parade at the Wagah Border in Amritsar.

Meanwhile, Pakistan on Thursday said any move to divert water meant for it under the Indus Water Treaty will be considered an Act of War as it announced the suspension of trade, bilateral accords, including the Simla Agreement, and airspaces with India, among other moves in retaliation to New Delhi's measures against the country in the wake of the Pahalgam attack.

As of 11:58 am, NIFTY India Defence index traded 3.84% or 262 points lower at 6,567.40, underperforming the NIFTY50 index which was down 1.57%.