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Heightened tensions in West Asia pull Sensex & Nifty down, but defence stocks soar

Shares of Apollo Micro Systems and IdeaForge Technology surged 10% each. GRSE stocks rose 6.25%, while Swan Defence and Heavy Industries gained nearly 5% read more A man passes by the Bombay Stock Exchange (BSE) building on the day of Union Budget 2025-26 presentation, in Mumbai. File image/PTI Indian equity markets slid Monday as tensions in the Middle East escalated after the United States launched airstrikes on Iran's nuclear infrastructure, unnerving investors and triggering broad-based selling across major indices. The benchmark BSE Sensex fell 511.38 points, or 0.62 per cent, to close at 81,896.79. It had dropped as much as 931.41 points, or 1.13 per cent, earlier in the session. The NSE Nifty declined 140.50 points, or 0.56 per cent, to settle at 24,971.90. STORY CONTINUES BELOW THIS AD Markets reacted to news that the US had directly entered the Israel-Iran conflict by striking Iran's Fordow, Natanz, and Isfahan nuclear sites over the weekend. While the conflict raised concerns about broader regional instability and energy supply disruptions, initial fears around oil shocks remained contained. Brent crude gained 0.49 per cent to trade at $77.39 a barrel. The rising geopolitical uncertainty weighed on frontline indices, but Indian defence sector stocks rallied strongly on expectations of higher spending and order flows. Shares of Apollo Micro Systems and IdeaForge Technology surged 10 per cent. Garden Reach Shipbuilders & Engineers rose 6.25 per cent, while Swan Defence and Heavy Industries gained up to 5 per cent. The sector's outperformance followed months of recovery. After a five-month period of weakness attributed to valuation concerns, defence stocks began to rebound in March and gained further traction in April and May. The momentum intensified after Operation Sindoor, during which India showcased its indigenous defence capabilities, including intercepting drones and missiles launched by Pakistan, according to a report by The Mint. Sentiment was further lifted by Prime Minister Narendra Modi's recent reiteration of the government's commitment to self-reliance in defence production under the Make in India initiative. Despite the day's volatility, select capital goods and metals stocks provided support to the market. Investors monitored global cues closely, with attention focused on whether Iran would retaliate further or escalate the conflict into the Strait of Hormuz, a key oil transit route. STORY CONTINUES BELOW THIS AD Market participants are expected to remain cautious amid heightened geopolitical risks, even as underlying domestic trends in select sectors remain resilient. With inputs from agencies