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Informist, Thursday, Jun. 5, 2025

By Anjana Therese Antony

MUMBAI – Traders are betting on defence stocks on hopes of further push from the government and higher exports amid rising demand for defence goods in foreign countries. They added long positions in the derivatives chain of defence stocks such as Hindustan Aeronautics, Bharat Dynamics, and Mazagon Dock Shipbuilders Thursday. While shares of these companies closed marginally higher, those of Cochin Shipyard and Data Patterns (India) which are not a part of the futures and options segment closed sharply higher.

Investors are also betting on more international orders amid media reports that the North Atlantic Treaty Organization has asked its European member states to build their air defence capabilities fivefold to tackle potential threats from Russia. The Indian government's push for localisation of defence manufacturing and growth of the country's defence exports have also been supporting sentiment for the sector. In 2024-25 (Apr-Mar), India's defence exports grew to an all-time high of over INR 236 billion, which is almost 34 times INR 7 billion in FY14, according to data from the defence ministry.

In the options chain of Hindustan Aeronautics, Bharat Dynamics, and Mazagon Dock, premiums on out-of-the-money call options increased, while those on puts declined. In the case of Hindustan Aeronautics, the highest open interest addition was at INR 5,100 call as well as put strikes. This is just 1% higher than the stock's Thursday closing price of INR 5071.60 on the National Stock Exchange. Traders also added some long positions in the futures series and open interest increased 0.1% to 9.13 million.

The overall Indian equity market, too, closed higher Thursday, extending gains for the second session. The market is likely to see limited movement Friday ahead of the Reserve Bank of India's monetary policy outcome at 1000 IST. The market is expected to have factored in a 25-basis-point reduction in key interest rates and will closely look for the apex bank's comments on economic growth, inflation, and likely risks from US tariffs. The Nifty 50 Thursday closed 0.5% higher at 24750.90 points and the Sensex ended 0.6% higher at 81442.04 points.

--Nifty 50 Jun closed at 24721.00, up 144.60 points; 123.10-point premium to the spot index

--Nifty 50 Jul closed at 24855.00, up 139.20 points; 253.70-point premium to the spot index

--Nifty 50 Aug closed at 24960.20, up 147.70 points; 370.10-point premium to the spot index

Eternal, BSE, Reliance Industries, HDFC Bank, ICICI Bank, Hindustan Aeronautics, Central Depository Services India, Bharat Electronics, Axis Bank, State Bank of India, Infosys, Mahindra & Mahindra, Bajaj Finance, Tata Consultancy Services, Bharti Airtel, Larsen & Toubro, Tata Motors, Glenmark Pharmaceuticals, and Bank of Baroda were the most active underlying stocks Thursday.  End

Edited by Ashish Shirke

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