Shares of India's top defence manufacturers retreated on Monday as investors digested the latest escalation in the military confrontation between the United States and Iran.
Hindustan Aeronautics Limited (HAL) fell 0.58% to trade at ₹4,474, while Bharat Electronics Limited (BEL) and Bharat Dynamics Limited dropped 0.78% and 0.55% respectively.
The sell-off in the defence sector reflects a broader risk-off mood sweeping global markets.
US stock futures declined and Brent crude prices climbed following a new exchange of airstrikes over the weekend, which marked a sharp reversal in diplomatic efforts and intensified fears of a wider regional war.
The repricing of geopolitical risk has spilled over into emerging markets, with Gulf stock indices also closing lower earlier in the week.
While defence stocks often benefit from heightened geopolitical tensions due to expectations of increased government spending, the immediate market reaction to the US-Iran flare-up has been one of caution.