The defence index has recorded decline in six out of seven straight sessions.
Motilal Oswal Financial Services initiated a 'Neutral' rating on BDL shares, with a target price of Rs 1,900 apiece. This implies a downside potential of more than 4% from the stock's previous closing price.
Defence stocks: Paras Defence shares rallied 9% after turning ex-split.
Bharat Electronics shares touched a fresh 52-week high following new order announcements, while Nifty Defence rose over 1% in intraday trade and has gained more than 3% over the past four sessions.
Defence stocks: 'Further profit-taking appears likely and would be considered healthy, given the significant rally in recent weeks,' says Ajit Mishra from Religare Broking.
Defence stocks: The sharp rise in the share prices pushed the Nifty Defence index up nearly 1.7 percent to hover around 9,037 in the morning.
Nifty Defence index rebounded after falling nearly 0.5 percent in the previous session. Ten of the 18 index constituents were trading in the green during the day.
Defence stocks: 'While the momentum may fluctuate, the long-term outlook for India’s defence sector remains structurally attractive in an increasingly uncertain global landscape,' says Ajit Mishra from Religare Broking.
Defence stocks: The stocks had recently seen significant profit booking at elevated levels, after an earlier rally triggered by Operation Sindoor and escalations in the Russia-Ukraine war cooled down.
The Nifty Defence index has ended in the green in 10 out of the past 11 sessions, and the m-cap of the index has jumped by Rs 48,700 crore since May 21.
On June 3, Nifty India Defence index was up 1.6 percent to hover around 8,833, thus bucking the downtrend in the overall market.
The Nifty India Defence index has extended gains for a third consecutive session, supported by hopes of stronger orderbooks for defence manufacturers and hopes of sustained demand for the longer term.
In recent days, defence shares have seen significant volatility after a record run following Operation Sindoor. Despite strong tailwinds, analysts are flagging frothy valuations in the share of defence suppliers.
The rise in the defence shares also comes amid an overall uptrend in the market, with benchmark indices Sensex and Nifty snapping a three-day losing streak
Three promoters of Paras Defence cumulatively sold 13.34 lakh shares of the company in large bulk deals, adding to the selling pressure in the pack which has seen a record run in recent weeks.
The Nifty India Defence index closed with modest gains of about 0.7 percent, but select shares saw strong buying interest. The DGMOs' assurance of armed forces being prepared for future missions 'should the need arise' supported investor sentiment in this space.
The Indian government announced that Pakistan attempted strikes on Indian military installations using drones and missiles overnight. Indian Armed Forces then targeted air defence radars and systems at multiple locations inside Pakistan, and an air defence system positioned in Lahore was successfully neutralised.
Defence stocks rebounded in Monday's trading session as escalating tensions between India and Pakistan prompted a fresh round of buying in the sector.
BDL shares have seen significant surge in recent days, rising over 30 percent in the past one month.
Bharat Dynamics' strong order book, rising exports, and improving execution make it a good bet in the current market
Bharat Dynamics signed a contract worth Rs 2,960 crore with the Defence ministry for the supply of medium-range surface-to-air Missiles (MRSAM) for the Indian Navy.
Defence stocks, including HAL and Mazagon Dock are in focus after the Defence Acquisition Council (DAC) approved major procurement projects worth Rs 1.44 lakh crore for the Armed Forces.
Antique has maintained 'buy' recommendation Bharat Dynamics stock with a price target of Rs 1,641, saying that execution normalisation will be the key for further re-rating of the stock.
Defence stocks have seen renewed positive interest since June 5 as the Bharatiya Janata Party (BJP) secured sufficient support from key allies and PM Modi returned to power for a third consecutive term.
With strong focus on innovation and technology, BDL is the showpiece of India's defence capabilities