Defence stocks came under pressure amid progress in Israel-Hamas ceasefire negotiations
Shares of defence companies such as Paras Defence & Space Technologies, Garden Reach Shipbuilders (GRSE), Bharat Electronics (BEL) among others slipped on July 7. The Nifty India Defence index, which tracks 18 stocks from the sector, slipped as much as 1.46 per cent in early trade.
From the Defence index constituents, Paras Defence led the decline, falling up to 7.84 per cent, followed by Astra Microwave, which fell as much as 2.78 per cent. Garden Reach Shipbuilders & Engineers too lost up to 2.77 per cent. BEL, Bharat Dynamics, Mazagon Dock Shipbuilders, Mishra Dhatu Nigam, Dynamatic Technologies, and Zen Technologies fell more than 1 per cent each.
On the other hand, gains in DCX Systems, Cyient DLM, BEML, Hindustan Aeronautics (HAL) capped the losses in the index.
Israel-Hamas Ceasefire: Defence stocks are under pressure as the ongoing ceasefire negotiations between Israeli officials and representatives of the Palestinian nationalist group Hamas gained momentum.
Although the latest round of indirect talks, held in Doha, Qatar, ended without a breakthrough on July 6, discussions are expected to resume today. Investor sentiment suggests growing optimism that a ceasefire agreement could be reached soon, which in turn is weighing on defence sector stocks.
Israeli Prime Minister Benjamin Netanyahu said that his upcoming meeting with the US President Donald Trump scheduled later today could help advance efforts toward a ceasefire in Gaza and secure the release of more hostages. He added that Israeli negotiators have been given clear instructions to pursue a ceasefire agreement under conditions that Israel has already accepted. Hamas, meanwhile, said it had responded to the latest proposal in a "positive spirit."
The government is planning to introduce a Rs 2,000 crore incentive programme to boost local manufacturing of civil and military drones, a Reuters report said citing government and industry sources. According to the report, the government is aiming to reduce reliance on imports and counter Pakistan’s drone programme, which is being backed by China and Turkey.
However, this development failed to cheer investors as investors put more emphasis on Israel-Hamas ceasefire progress.
During Prime Minister Narendra Modi's visit to Argentina ahead of the BRICS Summit in Brazil, drone technology emerged as a key area of potential collaboration between the two nations.
In talks with Argentine President Javier Milei, both sides agreed to strenghthen cooperation across sectors including critical minerals, oil and gas, defence, nuclear energy, space, and agriculture. The use of drone technology in various walks of life was a major focus in the India-Argentina talks.
The discussions included deploying drones for monitoring illegal fishing in Argentina’s exclusive economic zones, managing cattle, boosting agricultural productivity, and conducting border surveillance. Argentina also explored replacing helicopters with drones for inspecting high-tension power lines to reduce costs and improve efficiency.