Shares of defence companies rose up to 3 percent on Thursday, tracking gains in European defence stocks after US President Donald Trump voiced support for Ukraine’s efforts to reclaim all of its lost territory.
The trigger was Trump’s striking change of tone on Ukraine. Speaking on the sidelines of the United Nations General Assembly in New York, where he met Ukrainian President Volodymyr Zelenskyy, Trump said Kyiv could recapture its original borders with backing from Europe and NATO. This led to sharp rally in many of the defence stocks in Europe, including Saab, Hensoldt, MilDef among others.
Many defence firms in India have existing supply partnerships with European defence companies, making them potential beneficiaries of European rearmament. Moreover, the Indian defence exports have grown rapidly, with Europe emerging as a key destination.
The Nifty Defence index ended a three-session losing streak and rose 1.6 percent. Gains were led by Cochin Shipyard, Mazagon Dock and Garden Reach Shipbuilders & Engineers (GRSE), with 13 of the 18 constituents trading in the green.
Hindustan Aeronautics Ltd (HAL), Bharat Electronics Ltd (BEL) and other defence stocks also advanced. HAL was up more than 1 percent, rebounding after three straight sessions of losses. The stock rose after the Ministry of Defence signed a contract with the company for 97 Tejas Mark-1A fighter jets, valued at around Rs 67,000 crore.
Additionally, shipping stocks rallied after the Union Cabinet approved a Rs 69,725 crore package to revive India’s shipbuilding industry. Shares of Shipping Corporation of India, Cochin Shipyard, Mazagon Dock and GRSE climbed up to 4 percent.
The Cabinet, chaired by Prime Minister Narendra Modi, also extended the Shipbuilding Financial Assistance Scheme till March 31, 2036, with a corpus of Rs 24,736 crore. Officials said the measures are aimed at reducing reliance on foreign carriers and strengthening India’s maritime capabilities.
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