Indian Defence Stocks Gain on European Boost and Government Support

Indian defence stocks staged a strong recovery on Thursday, rising by 3% after three straight days of losses. The Nifty Defence index gained & closed at nearly 1%, buoyed by global cues and domestic policy support. The rally came in the wake of a surge in European defence stocks, following a shift in U.S. President Donald Trump’s stance on Ukraine.

European Trigger Sparks Momentum

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The key driver was Trump’s comments at the United Nations General Assembly in New York, where he met Ukrainian President Volodymyr Zelenskyy. Trump said that Ukraine could regain its original borders with backing from Europe and NATO, marking a notable shift in tone. His remarks led to sharp gains in several European defence companies, including Saab, Hensoldt, and MilDef.

Indian defence companies with supply partnerships and collaborations in Europe were seen as indirect beneficiaries of the development. The region has become a growing market for India’s defence exports, which have risen sharply in recent years.

Nifty Defence Index Rebounds

The positive sentiment spilt into Indian markets. Out of 18 Nifty Defence index constituents, 13 traded in the green. Cochin Shipyard, and Garden Reach Shipbuilders & Engineers (GRSE) led the gains with market open, however the GRSE shares closed at slight dip. Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) also advanced, with HAL climbing more than 1% after three sessions of decline and BEL stock price jumped over 2%.

HAL’s gains came ahead of a major deal with the Ministry of Defence, which is expected to sign a contract worth around ₹67,000 crore for 97 Tejas Mark-1A fighter jets, as reported by CNBC-TV18. The potential order further boosted investor confidence in the company’s growth outlook.

Shipping Stocks Rally on Cabinet Package

Shipping-related stocks also joined the uptrend after the Union Cabinet approved a ₹69,725 crore package to revive India’s shipbuilding industry. The shipping corporation of India, such as Cochin Shipyard stock price gained up to over nearly 2% following the announcement.

The Cabinet also extended the Shipbuilding Financial Assistance Scheme until March 31, 2036, with a corpus of ₹24,736 crore. According to officials, these measures aim to reduce India’s dependence on foreign shipping lines and strengthen domestic maritime infrastructure.

Conclusion

The twin boosts of European defence momentum and India’s policy support drove strong gains across defence and shipbuilding stocks. With rising exports, government-backed orders, and global collaborations, India’s defence sector appears poised for sustained growth.