Market Crash Alert: 6 Reasons Why Defence Stocks Tumbled Today

New Delhi, 24 June 2025 – Defence stocks witnessed a sharp fall in the Indian stock market today after a major geopolitical development. Former U.S. President Donald Trump, via his social media platform Truth Social, announced a surprise ceasefire between Israel and Iran, bringing an abrupt halt to the ongoing conflict in the Middle East.

The sudden announcement triggered a wave of profit booking in Indian defence counters, as investors who had ridden the recent geopolitical-driven rally locked in their gains. The Nifty Defence Index fell sharply, marking one of its steepest intraday corrections in June 2025.

Why Did Defence Stocks Fall Today?

The primary trigger for the fall in defence stocks was the announcement of a ceasefire between Israel and Iran. Over the past few weeks, defence-related stocks had surged due to escalating geopolitical tensions in the Middle East. Such global conflicts often lead to increased spending on defence contracts, providing growth opportunities for defence companies globally, including in India.

However, as the possibility of peace emerged, sentiment shifted from risk to caution. Investors preferred to move their capital from defence to other growth-driven sectors, especially after several defence stocks were in overbought territory.

Factors Behind Defence Stocks Fall Today:

Surprise ceasefire announcement between Israel and Iran

Heavy profit booking after recent sharp rallies in defence stocks

Cooling of geopolitical tensions dampening future defence spending expectations

Strength in global equity markets reducing the demand for ‘safe haven’ stocks

Major Defence Stocks That Fell Today

Let’s take a look at some of the major defence stocks that dragged the sector down in today’s session:

1️⃣ BEML Ltd. (Top Loser)

• Fall: 6.4% down, intraday low of ₹4,481
• Reason: Heavy trading volume indicating large-scale investor exits
• Impact: Major contributor to the fall in Nifty Defence Index

2️⃣ Garden Reach Shipbuilders (GRSE)

• Fall: 5.2% down, to ₹3,313
• Impact: Second-largest drag on the sector

3️⃣ Zen Technologies

• Fall: 2%+ decline
• Reason: High valuations prior to today’s correction triggered profit-taking

Other Notable Losers:

• Mishra Dhatu Nigam
• Paras Defence & Space Technologies
• Astra Microwave Products
• Cochin Shipyard
• Bharat Dynamics
• Data Patterns
• Unimech Aerospace

In total, 17 out of 18 Nifty Defence stocks were trading in the red today, dragging the index down by 2.2%, touching an intraday low of ₹8,868.

Donald Trump’s Ceasefire Announcement

In a dramatic statement on Truth Social, Donald Trump posted:

“There will be a Complete and Total CEASEFIRE… for 12 hours, at which point the War will be considered ENDED!”

This announcement came after 12 days of intense fighting between Israel and Iran, starting with Israel’s Operation Rising Lion, followed by Iran’s Operation True Promise 3.

Notably, Iran launched its final round of drone and missile attacks before the ceasefire deadline. The U.S. military confirmed intercepting a missile aimed at its Qatar base, but thankfully, no casualties were reported on either side.

While Trump claimed that the war would be officially over if 24 hours of peace is maintained, Iran’s Foreign Minister Abbas Araqchi added a condition:

“If Israel stops its illegal aggression against Iranian people, Iran has no intention of continuing its response.”

Market Sentiment Turns Cautious

The sharp fall in defence stocks today reflects broader market psychology. When fears of global conflict ease, investors typically shift capital toward high-growth sectors, abandoning safety plays like defence, gold, or oil.

Additionally, global stock markets rebounded sharply today, aided by:

• Lower crude oil prices as war risks diminished
• Positive cues from Asian and European equity markets
• Expectations of stable commodity supplies globally

Implications for Defence Investors

Should you worry about this fall in defence stocks?

Short-Term Outlook: The correction could continue for a few more sessions if geopolitical calm prevails. However, some of the fundamentally strong defence stocks might offer attractive re-entry points for long-term investors once the selling pressure eases.

Long-Term Outlook: Defence remains a strategic sector for India, given the focus on indigenous defence manufacturing under the Atmanirbhar Bharat initiative. Contracts related to modernisation of the Indian armed forces, drones, AI-based defence solutions, and naval expansions will likely benefit these companies in the long run.

Investors should monitor:

• Further developments in the Iran-Israel conflict
• Any new government contracts awarded to Indian defence firms
• Global geopolitical risks impacting the sector

Summary of Defence Stocks Fall Today