Market experts attributed the weakness to a combination of valuation concerns, liquidity pressures and profit booking.
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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.
Nifty India Defence index declined 2% in Friday's intra-day trade, corrected 17% from its all-time high level of 9,195.15 touched on June 6, 2025.
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.
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.
Shares of Paras Defence and Space Technologies hit a new high of ₹1,943.60, surging 8 per cent on the BSE in Monday's intra-day trade
Cochin Shipyard, Garden Reach Shipbuilders, Mazagon Dock, Data Patterns, Paras Defence, Zen Tech, Bharat Dynamics, Hindustan Aeronautics rallied by up to 8% in trade on Friday.
Strong fourth-quarter results from private defence firms including Paras Defence and Bharat Dynamics lift sentiment amid expectations of robust FY26 order flows
Shares of Paras Defence rallied 10% to hit a nine-month high of ₹1,469, ahead of a board meeting today to consider Q4FY25 results and a stock split proposal.
The defence stocks rally comes amid reports of the Pakistan army violating the ceasefire along the Line of Control (LoC) and Indian troops responding appropriately with small arms
The rise in the Paras Defence share price came after the company announced that it has signed a Memorandum of Understanding (MoU) with MicroCon Vision, part of CONTROP and the Rafael Group, Israel
The surge in these stocks followed the news that the Goods and Services Tax (GST) Council is likely to announce a uniform 5 per cent GST rate on all commercial-use drones in its upcoming meeting
The rise in the Paras Defence share price came after the company announced that it has secured an order of Rs 142.31 crore from the Center for High Energy Systems & Sciences (CHESS), DRDO, MoD