52 Week High Stocks: Nifty India Defence Index surges over 1% intraday, climbing over 3% in the last four sessions. What's next for its trajectory? Know the complete details.
The Indian stock market is currently witnessing a significant surge in stocks within the defense sector. On Tuesday, for the fourth consecutive trading day, shares of companies linked to defense reached new heights. Notably, several prominent companies' stocks hit their 52-week highs.
Investor Confidence Strengthens
The Nifty India Defence Index recorded an intraday gain of over 1 percent. Considering the last four trading sessions, this index has climbed over 3 percent in total. This rise indicates a continuous strengthening of investor confidence in the defense sector.
BEL Receives New Orders, Share Price Soars
A major reason for this surge is the recent orders received by Bharat Electronics Limited (BEL). The company secured new defense orders worth ₹528 crore after June 20. These orders include radar systems, communication equipment, electronic voting machines, jammers, shelters, control centers, spare parts, and related services. BEL's share price reached a 52-week high on Tuesday.
Other Defence Companies Also Show Gains
Not only BEL, but shares of other defense companies also performed well.
Bharat Dynamics Ltd and DCX Systems saw gains of nearly 2 percent.
Hindustan Aeronautics Ltd (HAL), Paras Defence, Mazagon Dock, and Garden Reach Shipbuilders experienced gains of up to 1.5 percent.
Support from New International Decisions
Another significant reason for this surge is the increase in global defense spending. Recently, on June 25, NATO countries decided to increase defense spending to 5 percent of GDP, up from the previous 2 percent. This decision will be implemented by 2035. This clearly indicates that seriousness regarding defense needs is growing worldwide.
India's Surveillance Capabilities Expanding
India has also taken steps to further strengthen its defense preparations. Following 'Operation Sindoor', the country has accelerated work towards modernizing its surveillance systems. As part of this, India is working on a plan to launch 52 special satellites. Simultaneously, a dedicated military space doctrine is also being prepared.
DRDO's Preparations Supporting Stocks
The Defence Research and Development Organisation (DRDO) is also currently working on an advanced version of the Agni-5 missile. This missile will be capable of carrying conventional bunker-busting warheads. This initiative by DRDO is seen as a sign of further strengthening domestic defense production. This has a direct impact on the performance of these companies and the movement of their stocks.
Growing Opportunities for Exports and Foreign Partnerships
NATO's decision to increase defense spending can provide India with new opportunities for exports in the defense sector. Considering India's 'Make in India' policy and focus on indigenous defense products, the possibilities of joint ventures with many foreign companies are also opening up. This situation can give Indian defense companies a better position in the international market.
Defence Sector's Performance in 6 Months
Looking at the figures from the last 6 months, several defense-related stocks have recorded gains of 15 percent or more. This performance has drawn investors' attention to this sector. Companies' order books are strengthening, and the support from the government has also provided confidence and strength.
Market Witnessing Buying Spree
During trading on Tuesday, b buying was seen in the shares of defense companies. Investors are confident that companies related to the defense sector will continuously acquire new projects and open up new avenues of earnings through exports in the coming time.
