On Wednesday, April 30, defense stocks took a hit after two days of rising prices. This happened even though tensions between India and Pakistan were high after a terrible attack in Pahalgam where 26 civilians died. Some companies like Hindustan Aeronautics (HAL), Garden Reach Shipbuilders & Engineers (GRSE), and Data Patterns saw their shares drop by as much as 5.2%.
GRSE had the biggest loss, falling 5.2%, while Data Patterns dropped by 4.5% and HAL by 3.1%. Other companies like Cochin Shipyard and Bharat Electronics (BEL) also saw declines of 1% to 3%. This decline came after defense stocks surged up to 28% in the last two days, with Paras Defence leading the way.
Interestingly, Paras Defence went against the trend and rose over 5%, bringing its total increase to 34.5%. The earlier rally was sparked by comments from Pakistan’s Defense Minister, Khawaja Muhammad Asif, who warned that India might launch a military attack soon due to the recent terror attack.
India accused Pakistan of supporting the attackers, which Prime Minister Narendra Modi condemned. PM Modi held a security meeting and gave the Indian armed forces full freedom to decide on response actions against the recent attack, emphasizing a strong approach to fight terrorism.
In the meantime, Pakistan’s Defense Minister said they were on high alert but would only consider using nuclear weapons if their existence was directly threatened. While India has limited contact with Pakistan, the latter has denied any part in the attack and called for an investigation.
Earlier in the week, the Nifty India Defence index rose more than 3%, with Paras Defence leading gains at 9.15%. Other defense companies also saw gains ranging from 2% to 5%. Moreover, India has also banned over a dozen Pakistani YouTube channels for promoting provocative content.
Leave a Reply