Operation Sindoor: Defence Stocks Surge; HAL, Bharat Electronics And Solar Industries Push Nifty India Defence Higher

Stock Market News: Domestic defence stocks rallied in early trade on May 7 on the NSE following India’s retaliatory attack on Pakistan in the aftermath of the Pahalgam terror attack. The Nifty India Defence index also surged nearly 2 per cent in early trade.

Impact of India Pakistan Conflict On Nifty Defence Index

As many as 8 out of the 18 constituents of the Nifty India defence index traded in the green at the time of writing. The Nifty India Defence gained in early trade as its top constituents, such as Hindustan Aeronuatics Ltd (HAL), Bharat Electronics Ltd and Solar Industries surged to intraday highs of up to 1.87 per cent. HAL, Bharat Electronics and Solar Industries hold 19.8 per cent ,18.53 per cent and 16.02 per cent weightage in the index respectively.

HAL share price gained 1.87 per cent to an intraday high of Rs 4,591.8 apiece on the NSE. Bharat Electronics share price gained 1.51 per cent to trade at a day-high of Rs 315.2 apiece on the NSE, and Solar Industries shares also surged 1.22 per cent to a day-high of Rs 13,350 apiece on the NSE. Notably, HAL is a leading state-owned maker of aircraft, while Bharat Dynamics is a leading maker of defence sector goods such as ammunition and missile systems.

The Ministry of Defence said in a press release on May 7 that the Indian Armed Forces have launched ‘Operation Sindoor’. The ministry said in the release that the operation was aimed at targeting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir. The ministry mentioned in the release that India has targeted nine sites. The release also said that India’s actions have been focused, measured and non-escalatory in nature.

“Our actions have been focused, measured and non-escalatory in nature. No Pakistani military facilities have been targeted. India has demonstrated considerable restraint in selection of targets and method of execution. These steps come in the wake of the barbaric Pahalgam terrorist attack in which 25 Indians and one Nepali citizen were murdered. We are living up to the commitment that those responsible for this attack will be held accountable,” the ministry stated.

DCX India Ltd, Data Patterns Ltd and Paras Defence Ltd shares and Astra Microwave Products Ltd traded higher by as much as 2.61 per cent on the NSE at the time of writing. Garden Reach Shipbuilders Ltd, Mazagon Dock Shipbuilders Ltd, Solar Industries Ltd, BEML Ltd and Hindustan Aeronautics Ltd traded higher by as much as 0.77 per cent on the NSE.

HAL Share Price History

Hindustan Aeronautics Ltd (HAL) shares have traded with an upward trajectory in the past year. The defence sector stock has surged over 17 per cent on the NSE in a year. On a year-to-date basis, shares of HAL have gained more than 7 per cent, and in six months the stock has traded higher by over 1 per cent on the NSE. In a month the stock has surged more than 17 per cent.

At the time of writing the Nifty India Defence index pared the gains to trade at 6,960.4 levels down by 50.3 points or 0.72 per cent.

Ravi Singh, SVP - Retail Research, Religare Broking Ltd told Outlook Money that while the headline indices experienced increased volatility in the beginning of the session following India's retaliation. The retaliatory attack has improved investor sentiment regarding the defence and aerospace sector amid escalating tensions.

"Benchmark indices Sensex and Nifty experienced heightened volatility at the opening bell on Wednesday, following missile strikes by Indian armed forces for operation "Sindoor". As a result, investor sentiment in the defence and aerospace sector has significantly improved"