On June 3, defence shares were on fire.
The Nifty India Defence index jumped 1.6% to 8,833, even as the broader market stumbled. While Sensex and Nifty dipped 0.4% each, defence stocks surged for the second straight day.
Why the rally? Simple: the world is heating up, and investors smell demand.
Global tensions—from Ukraine’s air raids deep into Russia to Iran’s growing nuclear stash—are making defence stocks look like the safest bets around.
What’s in it for the average Indian investor?
If you’ve been watching the news and thinking, “What now?”, you’re not alone. These military flare-ups might feel distant, but they affect markets instantly. When governments expect conflict, they invest in defence. And when defence budgets grow, defence companies get busy—and profitable.
Who’s winning on the charts?
Cochin Shipyard was the biggest gainer, soaring 5% to ₹2,019 per share.
BEML and Garden Reach Shipbuilders (GRSE) followed, rising 4% each.
Others like Astra Microwave, Midhani, DCX India, and Mazagon Dock clocked gains of over 2%.
Even smaller names like Paras Defence and Zen Technologies moved up 1.7%.
BEL, BDL, and Data Patterns stayed in the green too, though with more modest gains.
Only Hindustan Aeronautics (HAL) bucked the trend, staying slightly in the red.
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Why now? Let’s talk about the global mess.
On May 31, Russia launched a record-breaking 472 drones and 7 missiles at Ukraine—the largest drone wave in the war so far. Ukraine retaliated with a bold strike on Russian airbases, claiming over 40 warplanes destroyed. President Zelenskyy called it “a brilliant operation.”
In response to journalists’ questions, I emphasised that yesterday, Ukraine carried out a brilliant operation, planned and executed independently by our side. Ukraine is making it clear: we are not going to surrender, and we will not accept any ultimatums. But we do not want war.…
— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) June 2, 2025
The next day, they were supposed to meet for peace talks. Oops.
Meanwhile, Iran is back in the nuclear spotlight. The IAEA says Iran now holds 400 kg of uranium enriched to 60%, dangerously close to weapons-grade. Tensions with the US are rising again as talks stall, and pressure builds.
Media is speculating about an imminent Iran-U.S. deal. Not sure if we are there yet.
Iran is sincere about a diplomatic solution that will serve the interests of all sides. But getting there requires an agreement that will fully terminate all sanctions and uphold Iran’s nuclear… pic.twitter.com/56u9elxLIj
— Seyed Abbas Araghchi (@araghchi) May 29, 2025
So what’s the takeaway?
Whenever the world feels less safe, defence shares feel more valuable. The current market rally is less about profits and more about preparation—for what comes next.
Let’s be honest: nobody wants war. But if history has taught investors anything, it’s this—follow the budgets, not the speeches.
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