Defence stocks in focus: Defence stocks, which are already flying high so far this month, witnessed a further leg up on Tuesday, May 27, rising as much as 10% after the government approved the Advanced Medium Combat Aircraft (AMCA) Programme Execution Model.

The rise in defence stocks also added to the gains in the Nifty India Defence index, driving it higher for the fifth straight session. The 18 stocks pack added over 1% to hit a fresh record high of 8,728.20 in intraday trade today. So far this month, the index has gained 21%, adding to 11.5% rally seen in April and a 25% jump recorded in March. 

Garden Reach Ship Builders shares were among the top gainers, rising nearly 5%. Bharat Dynamics, Mazagon Dock, Hindustan Aeronautics and Bharat Electronics (BEL) gained between 0.5% to 3% in intraday deals.

According to analysts at IIFL, as quoted by Bloomberg, the sector could outperform others, with strong order visibility and positive sentiment helping sustain premium valuations. Besides increased spending on defense locally, global budgets too are growing, creating export markets for Indian companies, they say. Bharat Electronics is IIFL’s top pick by virtue of having the best execution track record among state-owned companies, the Bloomberg report added.

Govt approves stealth fighter jet

Defence Minister Rajnath Singh on Tuesday approved a framework for building the country’s most advanced stealth fighter jet. This development holds significance against the backdrop of growing military conflict with Pakistan.