Shares of defence companies tumbled by 11 per cent on the BSE today as initial counting trends indicated that the ruling NDA might secure fewer seats than anticipated in the Lok Sabha elections.
Shares of Bharat Electronics Ltd (BEL) plunged over 19.36 per cent, Hindustan Aeronautics fell over 14.29 per cent to ₹260.45 per share. In comparison, Bharat Dynamics shares declined by 10 per cent and Cochin Shipyard shares experienced a nearly 9% dip.
Also read: Election Results 2024: Nifty Oil & Gas index cracks 10%; GAIL, Oil India, ONGC, HPCL share prices decline 10-17%, RIL 7%
Many of these defence stocks have delivered multibagger returns to their investors over the past year. With investors holding substantial profits, analysts anticipated a wave of profit-taking to enter the market on the day of the general election voting.
Defence stocks have enjoyed significant attention during the Modi administration, surging to new peaks thanks to the government’s emphasis on fostering indigenous defense production as part of the Atmanirbhar Bharat initiative.
Among them, stocks of Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics surged nearly 10 percent and reached record highs in the previous session following exit polls forecasting a comeback of the BJP-led NDA, signaling a continuation of policies by the current government.
Brokerages also anticipate that the defence sector will be among the primary beneficiaries of the BJP’s re-election.
Also read: Stock market crash, Poll Results 2024: Experts suggest 9 stocks to add to your watchlist if BJP falls short of majority
“The focus of Modi 3.0 is likely to continue on developing the country’s public infrastructure, such as roads, water, metro, railways, defense, digital infrastructure, and green technologies,” Axis Securities said in a note.
Meanwhile, brokerage firm Jefferies said that defence and power sectors linked capex have the highest visibility. “If the current government retains majority, as exit polls suggest, it adds wings to the strong sector outlook,” it said.
Other than defence stocks, PSU bank stocks also witnessed a sharp plunge of over 10 per cent on June 4 on BSE, as early numbers were not in line with the exit poll.
You are on Mint! India’s #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!
Download The Mint News App to get Daily Market Updates.
More
Less
Published: 04 Jun 2024, 12:18 PM IST
Reference :
Reference link
