The defence stocks in India have fallen up to 7% since the ceasefire was announced in West Asia earlier this week. The share price of Garden Reach Shipbuilders & Engineers lost 5.5% and the large-cap defence stock Bharat Dynamics corrected 3.6% in the past week.

That apart, the stock price of Mtar Technologies has fallen almost 7% in the last five trading sessions on the news of the ceasefire, the most among the list of defence stocks. It was followed by DCX Systems, which fell by over 6% during the same time frame. There were stocks as well that declined.’

However, some defence stocks pocketed gains after NATO raised the defence spending. Cyient DLM has given a return of 5.2%. The share price of BEML has risen 3.74% in the last one week.

The US President Donald Trump insisted that NATO members reach the 5% level instead of  2% baseline level required by the alliance. However, only a few allies, like Poland and the Baltic states, are coming close to 5% at the moment. The US itself is under 3.4% in 2024.

NATO’s 32 member countries have reached a consensus agreement to dedicate 3.5% to core military needs by 2035, and 1.5% to broader “defence-related” areas such as cybersecurity and infrastructure.

The ceasefire in West Asia seemed to be holding a day after Trump expressed his unhappiness with Israel for violating the ceasefire.

“Indian equity markets have staged a recovery, supported by easing geopolitical tensions in the Middle East and a moderation in crude oil prices. While FIIs continue to withdraw capital, positive global cues are helping sustain domestic market momentum,” said Vinod Nair, Head of Research at Geojit Investments.