Market experts attributed the weakness to a combination of valuation concerns, liquidity pressures and profit booking.
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At 12:03 PM on Monday; NSE India Defence index was the top loser among sectoral indices, down 2 per cent, as compared to 0.08 per cent rise in the Nifty 50.
At 01:40 PM on Friday; Nifty India Defence index was the top gainer among sectoral indices, up 0.85 per cent as compared to 0.43 per cent decline in the Nifty 50.
NSE India Defence index was quoting higher for the third straight trading day, surging 3.7% during the period, as against 0.14% decline in the Nifty 50.
Leading the list is GNG Electronics (Target: ₹482 | Upside: 52%), named by Nirmal Bang, which expects robust growth as the company benefits from the govt's 'Make in India' thrust on electronics mfg.
Paras Defence share price rose today after the company said its arm, Paras Anti-Drone Technologies, has bagged an order worth ₹46.19 crore from the Ministry of Defence, Government of India.
Among individual stocks, Solar Industries, Bharat Electronics, Data Patterns and PTC Industries are Goldman Sachs' top buy ideas, while Bharat Dynamics has been rated Sell'.
Paras Defence, Midhani were seen trading above the super trend line hurdle on the daily chart, thus implying a likely positive trend going ahead.
At 10:32 AM; Nifty India Defence index was up 2.6 per cent, as compared to 0.28 per cent rise in Nifty 50.
Thus far in the month of July, Nifty India Defence index has underperformed the market by falling 12 per cent, as against 3.3 per cent decline in Nifty 50.
At 01:44 PM; the Nifty India Defence index was the top loser among sectoral indices, down 2.3 per cent, as compared to 0.41 per cent decline in the Nifty 50.
The sharp rally in defence stocks came after the Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, approved 10 major capital acquisition proposals on Thursday.
Shares of Paras Defence and Space Technologies were locked at the 10% upper circuit at ₹933.50 on the BSE as the stock turned ex-split from a face value of ₹10 per share to ₹5 per share.
Defence stocks fall after the US President Donald Trump announced a "complete and total" ceasefire between Israel and Iran, signalling a potential end to the escalating conflict in West Asia.
Defence stocks look promising due to the ongoing geopolitical tussle between Iran and Israel; moreover, the Indian government is likely to enhance defence spending over the next decade.
At 09:3 AM; Nifty India Defence index, the sole gainer among sectoral indices, was up 0.64 per cent, as compared to 1.1 per cent decline in the Nifty 50.
Defence stocks in India were rising today amid report that the Indian Army is set to receive a significant boost with the Defence Ministry expected to clear a ₹30,000-crore proposal for acquisition