BEL, Paras Defence rise up to 12% on US-Iran tensions; Nifty Defence up over 2%

BEL, Paras Defence rise in trade.

• Defence stocks like Paras Defence rose up to 13 percent on Monday.
• Tensions in West Asia boost demand for defence equipment.
• Sensex and Nifty fell sharply despite gains in defence shares.

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Defence-related shares, including Bharat Electronics and Paras Defence and Space Technologies, rose by up to 12 percent on Monday amid escalating tensions involving Iran, Israel and the United States.

Shares of Paras Defence and Space Technologies advanced more than 13 percent to Rs 722.5 per shaer on the NSE during the session.

Shares of Bharat Electronics gained around 2 percent to Rs 452.75 per share. Hindustan Aeronautics also traded higher, rising up to 1 percent.

The latest conflict has led to higher focus on defence preparedness across countries. This can result in increased demand for equipment such as missiles, surveillance systems, drones, ammunition and radar technologies. As a result, defence-linked stocks often witness buying interest on expectations of higher orders and improved business prospects.

The Nifty Defence index snapped its previous session’s losses and climbed over 2 percent in intraday trade.

Commenting on the market trend, Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the uncertainty related to the conflict in West Asia will weigh on markets in the near term.

"Weakness in the market can be used to slowly accumulate high quality stocks in domestic consumption themes like banking, automobiles, capital goods and defence," he said.

The rise in defence shares comes even as the benchmark equity indices Sensex and Nifty crashed in early trade, tracking a sharp spike in crude oil prices amid escalating tensions in the West Asia.

The Sensex tanked 2,743.46 points or 3.37 percent to 78,543.73 in early trade. The Nifty tumbled 533.55 points or 2.11 percent to 24,645.10.

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