Defence Stocks Lose Momentum as Middle East Peace Efforts Cool Global Sentiment
- 13th October 2025
- 05:00:00 PM
- 3 min read
Summary
Indian defence stocks declined up to 3% on October 13 as easing geopolitical tensions weighed on global defence indices. The Nifty India Defence Index fell 1.1%, led by Midhani and Data Patterns, tracking losses in European peers. Progress on the Gaza peace deal and upcoming Egypt peace summit shifted investor focus away from conflict-driven sectors, prompting profit booking in defence shares.
Mumbai | October 13
Indian defence stocks lost ground on Monday as easing tensions in the Middle East and progress towards a Gaza peace accord tempered global demand for defence and aerospace equities.
The Nifty India Defence Index slipped 1.1%, extending its losing streak to a fourth session in five days. The movement came in tandem with global peers, with the STOXX Europe Aerospace and Defence Index down 0.5% after Friday’s 1.9% decline, signalling a broader cooling in defence-related sentiment.
Broader Correction Across Defence Pack
Market leaders Mishra Dhatu Nigam (Midhani) and Data Patterns (India) were among the top decliners, shedding 2.8% and 2.3%, respectively. Other counters such as Bharat Dynamics, Zen Technologies, and Hindustan Aeronautics (HAL) also traded weaker, falling between 1.8% and 2%.
The sector’s underperformance comes after a strong multi-month rally driven by expectations of higher global defence budgets. With geopolitical risks receding, investors appeared to lock in profits from recent highs.
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Global Equities React to Ceasefire Developments
The sentiment shift followed reports that 13 hostages freed by Hamas were transferred to Red Cross custody, marking the first phase of a US-mediated ceasefire operation in Gaza. The exchange involves the release of nearly 2,000 Palestinian detainees, a move seen as a precursor to a larger regional peace initiative.
Meanwhile, Egypt hosted a major international peace summit in Sharm el-Sheikh, co-chaired by US President Donald Trump and Egyptian President Abdel Fattah al-Sisi, aimed at consolidating a long-term truce and stability across the region. The progress in diplomatic talks reduced immediate conflict-driven spending expectations, affecting defence stock valuations globally.
Global Moves, Not Policy Impact
The decline in Indian defence shares was not linked to domestic policy or trade developments. Instead, it reflected a global rebalancing as investors shifted away from sectors that had benefited from prolonged geopolitical uncertainty. European and US defence indices displayed similar patterns, confirming that the current weakness stems from an easing of war-related risk premiums rather than a change in India’s defence outlook.
India’s Long-Term Defence Story Intact
While the short-term sentiment has softened, India’s defence manufacturing growth remains structurally strong. The government’s continued focus on indigenisation, technology partnerships, and export competitiveness under the ‘Atmanirbhar Bharat’ framework continues to underpin long-term opportunities for domestic players.
Even after the latest correction, the Nifty India Defence Index remains up over 24% year-to-date, supported by consistent order inflows and policy momentum.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
