Defence Index Drops 2.5%: Defence stocks in India slipped on November 24 after weak trading pushed the Nifty India Defence index down more than 2.5%. The drop came soon after a Tejas fighter jet crashed in Dubai last week, and news of a possible Russia-Ukraine peace plan also made many investors nervous. The index touched 7,912.80 in the morning, which was the lowest level in over two weeks, and this marked the second day of losses.
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HAL Shares Slide After Tejas Accident
Hindustan Aeronautics Limited saw its shares fall almost 9% during the day. The fall happened because a Tejas light combat aircraft made by HAL crashed at the Dubai Air Show on November 21. The crash killed IAF officer Wing Commander Namansh Syal. The jet went down while doing a stunt before a big crowd.
Videos online showed the single-seat aircraft diving to the ground and bursting into flames. A thick line of black smoke rose above Al Maktoum International Airport as alarms sounded. The IAF later confirmed the pilot’s death.
Tejas is a single-engine, 4.5-generation fighter built by HAL after design work by the Aeronautical Development Agency. The crash is the second Tejas accident in less than two years. In March 2024, another Tejas jet crashed in Rajasthan’s Jaisalmer after a tri-services exercise.
Talks of Peace
The market also reacted to signs of a Russia-Ukraine peace plan. The US and Ukraine said they will keep working together on a new proposal after changing an older draft. They said they created a “refined peace framework”, though they shared no details. The White House said Ukraine told them the plan “reflects their national interests” and “addresses their core strategic requirements”. The earlier 28-point draft from the US asked Ukraine to give up land, accept military limits and drop its NATO goal, which many Ukrainians saw as surrender, reported Money control.
European countries did not take part in that first plan and later shared their own version. Their new proposal softened some land demands and suggested a US-style security guarantee for Ukraine. Europe’s defence stocks also fell. Rheinmettal fell 4%, Renk and Hensoldt dropped 3% each, and Saab AB slid over 2%. The Stoxx 600 Aerospace and Defense Index went down about 1%.
What Analysts Say About India’s Defence Stocks?
Analysts believe defence stocks in India may relax for a while. Jickson Sajee from INVasset PMS said defence shares may stay weak because of the Tejas crash and the peace talks. He said, “India’s defence cycle is structurally driven order books across major manufacturers remain robust, with multi-year visibility backed by indigenous procurement, rising exports, and the government’s push for self-reliance,” and he added that a single crash does not change long-term demand for fighter jets.
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He also said, “The proposed peace plan may ease global supply pressures, but it does not diminish India’s capex commitments, which continue to rise across aerospace, missiles, naval systems, and electronics. In the near term, defence stocks may see downward pressure, but the medium-term outlook stays strong, supported by execution visibility and policy continuity.”
Nitin Jain from Bonanza said the fall came from fear after the Tejas crash. He said, “This sentiment-driven action emphasizes that there is currently no proof of a systemic design problem in the Tejas program. To ascertain if the setback is an isolated incident or reveals more serious problems, the market’s immediate attention is still on the crash investigation’s findings.” He added that India’s push for local defence work and HAL’s strong order book will help the sector.
He said, “The impact on the basics of the defense sector is anticipated to be transient unless the investigation uncovers serious issues. However, until technical clarity is achieved, short-term risk perception and export prospects will continue to be closely examined.”
He also noted India’s defence exports reached Rs 23,622 crore in 2024-25 and go to more than 85 countries. He said, “A peace deal between Russia and Ukraine would probably cause a short-term drop in Indian defence stocks as investors shift their focus away from conflict-driven industries and the war premium diminishes,” and added that defence stocks often fall about 3% when peace hopes rise.
“The negative consequences of lowering international tensions are probably going to be countered by domestic demand and ongoing government emphasis on military modernization.”
Siddharth Maurya from Vibhavangal Anukulakara said “The Tejas crash and headlines around a potential Russia–Ukraine peace deal are clearly weighing on investor sentiment, triggering short-term volatility in defence stocks. But structurally, the narrative hasn’t changed — India’s defence manufacturers continue to benefit from strong order books, indigenisation policies, and export ambitions. While risk perception is elevated now, these are strategic, long-duration plays. If HAL and peers deliver on execution and communicate clearly, this phase may end up being a buying opportunity rather than a lasting drag on valuations.”
Major Loss
- Mishra Dhatu Nigam ended as the biggest loser, falling more than 5% to 328. BEML, GRSE and Astra Microwave Products slipped around 4%.
- Bharat Electronics dropped over 3% and became the top Nifty 50 loser.
- HAL closed more than 3% lower at 4,443 after sinking almost 9% earlier in the day. Analysts still believe HAL has long-term upside.
- Solar Industries and Zen Technologies fell nearly 3%.
- Bharat Dynamics, Paras Defence and Mazagon Dock Shipbuilders dropped more than 2%. Cochin Shipyard slipped over 1%.
