Even as the benchmark indices turned red in the Sunday morning trade ahead of the presentation of the Union Budget by Finance Minister Nirmala Sitharaman, most of the defence stocks have shown upward momentum.
After opening the day on a positive note, the BSE Sensex later fluctuated and quoted 13 points up at 82,282.82 in the morning trade, while the NSE Nifty skidded 7.90 points to 25,312.75 after opening marginally higher.
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This is the first Union Budget after Operation Sindoor and the India-Pakistan stand-off in May, and expectations are high that there will be a substantial increase in defence outlay in the budget to boost national security and continue modernisation and capacity building of the armed forces.
Defence stocks had ended on a positive note on Friday as well, with the defence index recording its steepest weekly gain since May. The rally continued during the special trading session on Sunday, with a few of the stocks rising nearly five per cent in the morning trade.
From the Sensex stocks, Bharat Electronics (BEL) rose over three per cent, on expectations of increased allocation. BEL, Power Grid, NTPC and HDFC Bank were among the other major gainers from the pack.
Nibe Limited and High Energy Batteries rose over 9 per cent on the defence index. Other major gainers in the pack included Unimech Aerospace and Manufacturing Ltd, Ideaforge and MTAR Technologies, which rose over five per cent.
HAL rose nearly two per cent, while Data Patterns rose over four per cent.
In the Union Budget 2025, the government had allocated ₹6.81 lakh crore to the sector, which was a 9.5 per cent increase from the previous year. According to brokerage firm Emkay, the recent geopolitical developments have made it necessary for the government to increase spending in the defence sector.
Nuvama Institutional Equities also expects that the allocations to the defence sector will be significantly higher.