India’s Defence Stocks Surge as Israel-Iran Conflict Escalates

13 Jun 2025 , 12:26 PM

India’s defence stocks saw a strong rally on Friday, fuelled by rising geopolitical tensions in the Middle East. The renewed conflict between Israel and Iran has triggered investor interest in the defence sector, both globally and in India.

Shares of key Indian defence companies are in the spotlight

• Garden Reach Shipbuilders, Zen Technologies, and Cochin Shipyard saw their stock prices rise between 4% and 6% during Friday’s trade.
• Ideaforge Technology emerged as the top gainer among defence stocks, posting an impressive 8.1% surge on the BSE.
• Astra Microwave Products recorded a gain of 4%, reflecting strong investor interest.
• Hindustan Aeronautics Ltd (HAL) also joined the rally, advancing 1.9% to close at ₹5,049.50.

Israel-Iran Escalation Triggers Global Alarm: The escalation follows Israel’s targeted airstrikes on Iran’s nuclear facilities and ballistic missile production sites. According to international media reports, multiple explosions were reported near Iran’s Natanz enrichment facility. Iranian state television confirmed the death of elite Revolutionary Guard commander Hossein Salami, while Israel declared a state of emergency anticipating retaliatory missile and drone attacks.

Global Markets React to Geopolitical Tension: The global market response was immediate. Brent crude surged over 9%, touching $75.36 per barrel, while gold rallied 1.5% to reach $3,434 an ouncejust shy of its all-time high. Equities across Asia weakened, and safe-haven assets like the Swiss franc and gold saw increased buying as global investors shifted into defensive positions.

Apart from the external trigger, domestic momentum has also played a role in the rally. India’s ₹16 trillion defence procurement pipeline and its strong push toward indigenisation have positioned companies like HAL, Bharat Electronics (BEL), and Mazagon Dock Shipbuilders to benefit from robust order books and expanded manufacturing capacity.

The developing conflict in the Middle East, coupled with India’s long-term structural tailwinds, is expected to keep investor sentiment buoyant around defence-linked counters. However, market watchers caution that further escalation may cause broader market volatility, especially around oil prices and global risk appetite.

As the world awaits the outcome of the upcoming U.S.-Iran nuclear talks in Oman, Indian defence companies remain in the spotlight, not just as short-term beneficiaries of global instability, but as long-term plays in a strategic sector backed by policy support and rising demand.

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