Shares of domestic defence companies witnessed strong buying interest on Monday, driving the Nifty India Defence index to a one-month high. The rally was fuelled by a dual catalyst: heightened global geopolitical tensions following US military action in Venezuela and sustained domestic policy support from recent large-scale procurement approvals.

Market movement

The Nifty India Defence index surged over 2.60% to trade at 7,989.80 by late morning. The rally was led by MTAR Technologies, which jumped 6.35% to an intraday high of ₹2,523.

Other major gainers included:

• Sectoral heavyweights: Hindustan Aeronautics Ltd (HAL), Cochin Shipyard, and Garden Reach Shipbuilders (GRSE) all rose over 2%

Immediate trigger: Operation Absolute Resolve

The primary driver of Monday's surge was the sudden escalation in geopolitical tensions following the announcement of 'Operation Absolute Resolve', a US military raid in Venezuela involving airstrikes which resulted in the capture of president Nicolás Maduro and the first lady over the weekend.

US President Donald Trump declared that the US would oversee an interim transition in Venezuela, specifically highlighting control over the nation's vast oil resources. The news triggered "safe-haven" demand for defence assets, as investors bet on increased global military readiness and potential supply chain disruptions.

Sustained trigger: ₹79,000 crore DAC Boost

While the Venezuela news provided the immediate spark, sentiment in the sector has been bullish since the defence acquisition council (DAC) approved capital acquisition proposals worth ₹79,000 crore on December 29, 2025.

These approvals, aimed at modernising the armed forces with indigenous equipment, have kept order book visibility high for key players:

• Indian Army: Approvals include Loiter Munition Systems (kamikaze drones), Low-Level Light Weight Radars, and Long-Range Guided Rocket Ammunition for the Pinaka MLRS.

Effect on broader market

The geopolitical shockwaves extended beyond the defence sector. Oil markets reacted sharply. ONGC opened 2.2% higher before paring gains, while Reliance Industries hit a record high of ₹1,611.80. Gold prices saw upward momentum, and Bitcoin briefly reclaimed the $93,000 mark as investors sought alternatives to traditional currency amid global uncertainty.