Defense Stocks Plummet: BEL, HAL, Mazagon Dock, and Others Fall Up to 15%
Defensive stocks plummeted on June 4, 2024, with Bharat Electronics hitting a 15% lower circuit and other companies like Hindustan Aeronautics, Bharat Dynamics, and Mazagon Dock Shipbuilders falling 10-12%. This decline followed a recent bull run fueled by the Modi government's Atmanirbhar Bharat initiative. The drop was driven by profit booking after significant gains, especially following exit polls predicting a BJP-led NDA return. Over the past year, these stocks had seen substantial returns, prompting investor sell-off on election result day.
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Jun 5, 2024
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On June 4, 2024, a significant event unfolded in the market as shares of defense-related companies experienced a substantial decline, with some stocks plummeting as much as 15%. The impact was particularly severe for Bharat Electronics, which was locked in a 15% lower circuit on the BSE. Other defence stocks, including Bharat Dynamics, Hindustan Aeronautics, Mazagon Dock Shipbuilders, and Cochin Shipyard, also faced significant declines, each falling around 10-12%. This sell-off was not random but a calculated move by investors to take partial profits following a recent bull run in these stocks, favoured under the Modi government's Atmanirbhar Bharat initiative to indigenise defence manufacturing.
In the previous trading session, shares of Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics surged nearly 10 per cent, reaching their all-time highs following exit polls that predicted a return of the BJP-led NDA. This surge was attributed to the expectation of policy continuity from the incumbent government.
Defence stocks have delivered impressive returns over the past year, with some stocks like Bharat Dynamics, Bharat Electronics, Hindustan Aeronautics, Mazagon Dock Shipbuilders, and Cochin Shipyard recording over twofold returns. As investors sat on substantial profits, analysts anticipated a wave of profit booking on the day of the general election results, which ultimately led to significant declines in these stocks. This decline was further exacerbated by the Modi government's Atmanirbhar Bharat initiative, which has been a key driver of these stocks' performance.
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