India-Pakistan Conflicts Set Nifty India Defence Index on Fire

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Nifty India Defence Index Ignites: A Breakout Trend Amid Geopolitical Shifts

By S Jha

MUMBAI, May 16, 2025 – The Nifty India Defence Index is experiencing a seismic shift, not just a rally, but a full-fledged breakout trend, according to StockEdge’s latest insights.

The index, which tracks the performance of defence-related stocks, has seen an extraordinary surge in relevance, particularly in the context of India’s ongoing defence modernisation and recent geopolitical tensions.

From May 6 to May 15, the index’s participation has spiked across all timeframes, with 100% of its constituents trading above both the 20-day and 50-day Simple Moving Averages (SMA), and 94% showing positive Relative Strength over 55 days (RS55).

This technical strength underscores a robust market sentiment, driven by strategic capabilities and geopolitical imperatives.

StockEdge’s analysis highlights the index’s impressive performance over various periods:

+197.49% in the last two years
+35.45% in the last year
+16.89% in the last month

This surge reflects the market’s anticipation of India’s defence sector growth, fueled by policies like “Make in India,” modernisation of armed forces, a quick retaliation doctrine, and a push for strategic autonomy. The ecosystem, encompassing missiles, surveillance technology, and other defence essentials, is expanding rapidly, creating a fertile ground for investment opportunities.

Momentum Leaders and Breadth Analysis

StockEdge identified key momentum leaders within the Nifty India Defence Index based on their 1-month scores:

Astra Microwave: Score of 90, excelling in communications and radar technology
Bharat Dynamics: Score of 85, a leader in missile systems
Solar Industries: Score of 82, specialising in military supplies and explosives

These stocks are not merely performing well; they embody India’s strategic defence capabilities. The breadth analysis as of May 6 further illustrates the trend:

83% of stocks are above the 20-day SMA
89% are above the 50-day SMA
44% are above the 200-day SMA

While near-term momentum is accelerating, long-term technicals are gradually aligning, indicating sustained growth potential.

Top 10 Defence Stocks Since May India Strikes Against Pakistan

The recent strikes by India against Pakistan have further amplified the defence sector’s significance, with several stocks witnessing substantial gains. Here are the top 10 defence stocks and their performances since the strikes in May:

Hindustan Aeronautics Ltd (HAL)
- Gain: +12.5%
- Reason: HAL’s role in aircraft manufacturing and maintenance has been crucial, with increased orders for indigenous fighter jets.
Bharat Electronics Ltd (BEL)
- Gain: +11.8%
- Reason: BEL’s advancements in radar and communication systems have seen heightened demand amid border tensions.
Larsen & Toubro (L&T)
- Gain: +10.3%
- Reason: L&T’s defence division, focusing on heavy engineering and infrastructure, has benefited from government contracts.
Mazagon Dock Shipbuilders Ltd
- Gain: +20.7%
- Reason: The company’s shipbuilding capabilities, including submarines and warships, have been in focus due to naval modernisation.
Bharat Dynamics Ltd
- Gain: +29.2%
- Reason: As a leader in missile systems, Bharat Dynamics has seen increased interest following the strikes.
Astra Microwave Products Ltd
- Gain: +25.9%
- Reason: Its expertise in radar and communication technologies aligns with India’s defence upgrades.
Solar Industries India Ltd
- Gain: +8.5%
- Reason: The company’s role in providing explosives and military supplies has gained traction.
Data Patterns (India) Ltd
- Gain: +80.2%
- Reason: Specialising in electronic systems for defence, Data Patterns has seen robust growth.
Paras Defence and Space Technologies Ltd
- Gain: +77.8%
- Reason: Its focus on optics, electronics, and electromagnetic technologies has been critical.
Garden Reach Shipbuilders & Engineers Ltd
- Gain: +30%
- Reason: The company’s shipbuilding and engineering services have been pivotal in naval expansion.

Expert Commentary

The defence sector’s performance has sparked discussions on X, with investors and analysts weighing in on the trend. @DefenceInvestor tweeted, “The Nifty India Defence Index’s breakout is a clear signal of market confidence in India’s strategic capabilities. Stocks like HAL and BEL are not just riding the wave; they’re leading it.”

Another user, @GeoPolExpert, noted, “Geopolitical tensions are accelerating India’s defence modernisation. The +197.49% gain in two years is a testament to the sector’s resilience and growth potential.”

Market Implications

The defence sector’s ascent is no longer a slow-burn theme but a fast-moving narrative. India’s focus on indigenisation, coupled with global defence spending trends, positions the sector at the intersection of geopolitics and economic growth.

For momentum traders, StockEdge’s advice is clear: ride the strength, trail stops, and let winners run. The Nifty India Defence Index’s surge is a reflection of both tactical responses and market reactions, making it a critical area for investors to watch.

(Disclaimer: This article makes no recommendation for any kind of trades in the stock market)

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