MTAR Tech, HAL shares rally amid US-Venezuela tensions; Nifty defence hits one-month high
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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%
Midcap & niche players: Solar Industries, Astra Microwave Products, Bharat Dynamics Ltd (BDL), and Data Patterns were among the top performers on the index
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.
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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.
Indian Navy: Clearance for Bollard Pull Tugs, High-Frequency Software Defined Radios, and the leasing of HALE (High Altitude Long Endurance) RPAS drones for maritime surveillance.
Indian Air Force: Greenlight for Astra Mk-II (Beyond Visual Range) missiles, SPICE-1000 guidance kits, and Full Mission Simulators for the LCA Tejas.
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.