Defence Stocks Surge as Israel-Iran War Escalates; GRSE, BDL, BEL Lead the Rally

Defence stocks rallied sharply on June 13 as geopolitical tensions between Israel and Iran intensified, triggering fresh interest in companies linked to the defence and aerospace sectors. The Nifty India Defence Index rose 2.5%, snapping a two-day losing streak and marking a strong rebound for the sector.

This rally comes after a phase of profit booking, reigniting momentum in defence stocks amid renewed global uncertainty.

War Escalation Sparks Market Reactions

The surge in defence stocks was closely tied to the escalating conflict between Israel and Iran, which took a dramatic turn as Israel launched what it called “preemptive strikes” on Iranian military infrastructure.

Israeli Prime Minister Benjamin Netanyahu confirmed that the strikes were aimed at multiple strategic targets, including Iran’s nuclear enrichment program, weaponisation facilities, missile programs, and leading nuclear scientists.

These targeted attacks resulted in the deaths of top Iranian military officials, including Mohammad Bagheri, the armed forces chief, and IRGC commander Hossein Salami.

In response, Iran launched over 100 drones toward Israel, escalating fears of a prolonged conflict in the region. The Israel Defence Forces (IDF) acknowledged the seriousness of the retaliation, urging citizens to prepare for “difficult hours” ahead.

Defence Stocks See Renewed Buying

This sharp escalation in geopolitical tensions led to renewed buying interest in Indian defence stocks, as investors bet on higher defence equipment orders and government contracts in response to the rising global demand for military hardware.

Garden Reach Shipbuilders and Engineers (GRSE) emerged as the top gainer on the Nifty India Defence Index, surging over 5% to trade at ₹3,137.40. The stock had recently seen some correction, but made a strong comeback on the back of fresh developments.

Zen Technologies followed with a nearly 5% gain, reflecting strong investor confidence in the company’s tech-based defence solutions.

Other notable gainers included:

• Cochin Shipyard: up over 4%

• Paras Defence and BEML: gained nearly 4%

• Bharat Dynamics (BDL) and Hindustan Aeronautics (HAL): up around 3%

• Bharat Electronics Ltd (BEL): rose over 2%

• Solar Industries and Mazagon Dock Shipbuilders: traded over 1.5% higher

The rally reflects a broader market sentiment that favours defence sector stocks during times of global military unrest.

Rally Resumes After Brief Cooling-Off

Interestingly, this surge comes shortly after the defence sector had witnessed profit booking at elevated levels, following a strong rally triggered by Operation Sindoor and developments in the Russia-Ukraine war.

As the earlier triggers cooled off, many stocks saw a temporary dip. However, the fresh wave of conflict between Israel and Iran has reignited investor optimism, as global governments are expected to ramp up defence spending.

The conflict is likely to fuel demand for advanced military equipment, missiles, drones, and naval assets—areas where Indian companies are gaining strong expertise.

Why Defence Stocks Are in Focus

Defence stocks often come under the spotlight during times of war or international tension due to the anticipated rise in defence budgets and government contracts. As countries gear up to secure their borders and strengthen military capabilities, companies involved in defence manufacturing, shipbuilding, missile technology, and electronics benefit directly.

India’s push towards self-reliance in defence (Atmanirbhar Bharat) and rising defence exports have also positioned domestic players as global suppliers. This gives companies like HAL, BEL, BDL, and GRSE a strategic advantage in tapping both local and international demand.

Heightened tensions act as short-term catalysts, but India’s long-term defence growth story remains intact.

Market Outlook: Volatility Ahead, But Sentiment Positive

While the rally in defence stocks is strong, analysts warn of continued volatility in the coming sessions, depending on the direction the Israel-Iran conflict takes. Markets tend to react sharply to news flow during such sensitive geopolitical events.

However, the underlying sentiment remains bullish for the defence sector, especially as India continues to modernise its armed forces and increase defence indigenisation.

Conclusion

Defence stocks stole the spotlight on June 13, with several companies posting impressive gains amid intensifying tensions between Israel and Iran. The resumption of the rally signals investor confidence in the sector, driven by expectations of higher defence spending globally.

With companies like GRSE, BDL, BEL, HAL, and others back in action, the defence index appears poised for continued momentum, provided the geopolitical environment remains tense and the demand outlook stays strong.

As global conflicts rise, so does the strategic importance of defence investments—making the sector one to watch in the coming weeks.