Operation Sindoor Sparks Defence Stock Rally

Defence-related stocks experienced significant gains on Friday, with companies such as Hindustan Aeronautics and Bharat Forge seeing increases of up to 4%. This surge comes amid escalating tensions between India and Pakistan, highlighting the market's reaction to geopolitical instability.

Paras Defence led the charge with a 5.65% rise, reaching an intraday peak of Rs 1,436.00 on the NSE. Following closely were Bharat Dynamics and Bharat Forge, with increases of 4.955% and 4.89% respectively.

Government and Defence Manufacturers to Meet

The heightened interest in defence stocks coincides with news of an upcoming meeting between the Modi government and defence manufacturers. Baba Kalyani, Chairman and Managing Director of Bharat Forge, mentioned to CNBC TV18, "We've been called to Delhi next week. Our team is going. I can't say more."

Background of the Tensions

Recent Indian military operations in Pakistan and Pakistan-occupied Kashmir have escalated tensions. India's strategic missile strikes on May 6-7 neutralised nine terrorist installations, leading to a sharp increase in military preparedness and defence spending.

The defence allocation in India's budget for FY2026 is set at Rs 6.81 lakh crore, with Rs 1.8 lakh crore designated for capital expenditure, underscoring the government's commitment to strengthening national defence.

Recent Developments

Pakistan launched an offensive on Thursday evening, deploying loitering munitions against strategic locations in Jammu and Kashmir. Indian forces responded by deploying air defence systems, resulting in multiple explosions and emergency measures in several districts.