Profit Booking Hits Defence Stocks: Nifty Index Falls, GRSE Sheds 8%, BEML 6% as Iran-Israel Tensions Ease

On Tuesday, shares of defence companies experienced a sharp decline, breaking a two-day rally that had been fueled by escalating geopolitical tensions in West Asia. The drop came as investors booked profits amid signs of easing conflict between Israel and Iran. Among the hardest hit are Garden Reach Shipbuilders & Engineers (GRSE) and BEML, both of which saw significant losses as market sentiment shifted following the de-escalation news.

Nifty Defence Index Today

Prior to this development, the Nifty India Defence index had shown strong performance, gaining over 4 percent from June 20 to June 23. This upward trend was largely driven by investor expectations of increased defense spending and higher order volumes for Indian defense companies in the event of a prolonged conflict between Israel and Iran. Such geopolitical uncertainties typically boost defense sector stocks due to anticipated government contracts and military expenditures.

Top Losers Today

The top five losing stocks on the Nifty Defence index were Garden Reach Shipbuilders & Engineers (GRSE), BEML, Mishra Dhatu Nigam (Midhani), Astra Microwave Products, and Paras Defence & Space Technologies. These stocks dropped between 5% and 10%.

Top Gainers Today

Major companies like Hindustan Aeronautics (HAL), Bharat Dynamics (BDL), and Bharat Electronics (BEL) also saw their share prices fall by up to 4%. Other companies that faced losses included Zen Technologies, Unimech Aerospace and Manufacturing, Data Patterns, ideaForge Technology, and Dynamatic Technologies.

GRSE Share Price Today

NSE: GRSE - On June 24, shares of Garden Reach Shipbuilders & Engineers Ltd fell sharply, closing at Rs 3,201.20, down by Rs 291.50 or 8.35% by 2:41 PM. The stock opened at Rs 3,515.00 and touched an intraday high of Rs 3,524.00 before sliding to a low of Rs 3,151.00. Despite the decline, the stock remains significantly above its 52-week low of Rs 1,184.90, though it pulled back from its recent 52-week high of Rs 3,538.40.

BEML Share Price Today

NSE:BEML - As of 2:46 PM on June 24, BEML Ltd was trading at Rs 4,490.20, marking a sharp drop of Rs 298.50 or 6.23% for the day. The stock began the session at Rs 4,801.00 and climbed to an intraday high of Rs 4,822.30, before slipping to a low of Rs 4,461.00. Despite today's decline, BEML remains well above its 52-week low of Rs 2,350.00, although it has moved away from its 52-week high of Rs 5,488.00.

In addition to impacting defence stocks, President Trump's announcement triggered a notable fall in global crude oil prices. The easing of tensions helped reduce concerns about disruptions to oil supplies from the volatile Middle East, calming markets that had been jittery over the possibility of escalating hostilities.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services explained that the "dramatic developments in West Asia culminating in US President Trump's announcement of a ceasefire indicate that the worst of the conflict is over." His analysis reflected the general investor optimism that the region might avoid further escalation, which had previously fueled defensive sector gains.

However, on June 24, the index reversed course and fell by 2.2 percent during the trading session. Market activity revealed a broad sell-off, with 17 out of the 18 constituent companies in the index trading in negative territory. The only exception was Cyient DLM, which managed to post a modest gain of over 1 percent, standing out as the sole positive performer amid widespread declines.

"The recent correction in defence stocks triggered by easing Middle East tensions reveals a deeper, often ignored truth. This sector's performance is as much about market psychology as it is about fundamentals. While emergency orders and conflict-driven demand can spark rapid rallies, they also inflate valuations beyond sustainable levels, leaving stocks vulnerable to sudden downturns when headlines shift," said Tarun Singh, MD and Founder, Highbrow Securities.

Overall, the market's reaction on June 24 demonstrated how swiftly investor sentiment can change in response to geopolitical news, as easing tensions prompted a reassessment of risks and led to profit-taking in previously high-flying defense stocks.

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