Defence Shares Continue Uptrend, With Cochin Shipyard & BEML Gaining Up to 5%

On June 3, the Nifty India Defence Index saw strong growth, with the Nifty India Defence index rising for the second day in a row, boosted by rising global tensions of war between Russia and Ukraine. The defence index went up by 1.6%, reaching about 8,833, while the overall market, including benchmark indices Sensex and Nifty, was down nearly 0.4 percent each in the red.

Cochin Shipyard was the top performer, jumping more than 5% to Rs.2,019 per share. GRSE and BEML also did well, rising around 4%. Other defence stocks like Astra Microwave, Solar Industries and Mazagon Dock were up by over 2%.

The rise in defence stocks is mainly due to increasing worries over the Russia-Ukraine war and concerns about Iran's nuclear activities, which are expected to boost demand for defence products.

However, shares of Hindustan Aeronautics (HAL) experienced slight losses.

You see, after a brief period of calm amidst the war between Russia and Ukraine, the hopes of a possible deal were shattered as Russia launched 472 drones and seven missiles at Ukraine on May 31, marking it the largest drone assault since the war's inception.

After this, Ukraine retaliated by launching major strikes on Russia's military airbases on June 1, a day prior to when both countries were scheduled to sign the peace in Istanbul. The Ukrainian President, Volodymyr Zelenskyy, called it a "Brilliant Operation," recalling it in history.

With tensions continuing to grow, defence stocks remain in focus for investors.