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Russian (RU) After two straight sessions of gains, defence stocks saw profit booking on Wednesday, 30 April, even as geopolitical tensions between India and Pakistan remained elevated following the deadly Pahalgam terror attack.
Shares of Hindustan Aeronautics (HAL), Garden Reach Shipbuilders & Engineers (GRSE), Data Patterns, Cochin Shipyard, and others declined up to 5.2% during the session. GRSE led the losses, dropping 5.2%, followed by Data Patterns (-4.5%) and HAL (-3.1%). Cochin Shipyard, Bharat Electronics (BEL), and Mazagon Dock Shipbuilders fell between 1% and 3%.
This pullback follows a strong rally in the previous two sessions, during which defence stocks surged up to 28%, led by Paras Defence. On Wednesday, Paras Defence bucked the trend and rose over 5%, taking its overall rally to 34.5%.
The sharp gains earlier were triggered by remarks from Pakistan’s Defence Minister Khawaja Muhammad Asif, who warned that a military incursion by India was imminent, following the 22 April terrorist attack on tourists in Pahalgam that killed 26 civilians.
India has blamed Pakistan for supporting the attackers, calling it the worst civilian attack in years. In response, Prime Minister Narendra Modi has vowed to pursue and punish those responsible.
On Tuesday, PM Modi chaired a high-level security meeting and conveyed that the Indian armed forces have full operational freedom to decide the mode, timing, and target of India's response to the recent terror attack in Pahalgam, Jammu and Kashmir. According to officials cited by news agency PTI, the Prime Minister said, “It is our national resolve to deal a crushing blow to terrorism.”
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“We have reinforced our forces because it is something which is imminent now... strategic decisions have been taken,” Pakistan’s Defence Minister Khawaja Muhammad Asif told Reuters. He added that the Indian government’s rhetoric was intensifying and that Pakistan’s military had briefed the civilian leadership on the threat of an Indian assault, without providing further details.
While India has downgraded diplomatic ties, suspended the Indus Waters Treaty, shut the main land border crossing, and cancelled visas for Pakistani nationals, Islamabad has denied any role in the attack and called for a neutral investigation. Pakistan remains on high alert, though Asif said nuclear weapons would only be considered in the event of “a direct threat to our existence.”
On Tuesday, the Nifty India Defence index rose over 3%. Paras Defence led the charge with a 9.15% gain, while Data Patterns, GRSE, and Unimech Aerospace and Manufacturing rose 5.5%, 5%, and 4.8%, respectively. BEL, Mazagon Dock, HAL, and Cochin Shipyard gained between 2% and 4%.
Separately, on Monday, the Indian government banned more than a dozen Pakistani YouTube channels, including those of prominent news outlets such as Dawn, Samaa TV, ARY News, Bol News, Geo News, and Suno News, citing “provocative” content.
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