Defense stocks surge up to 7% led by Mazagon Dock. Here’s why?
Mazagon Dock Shipbuilders which hit the day's high of Rs 2,219.90 on the NSE following an order for constructing DWT Multi-Purpose Hybrid Power Vessels for an undisclosed amount from a European client.
Cochin Shipyard, Bharat Electronics (BEL), Hindustan Aeronautics (HAL), Bharat Dynamics, Bharat Heavy Electricals (BHEL), BEML, Mtar Technologies, Solar Industries, Paras Defence and Space Technologies and Bharat Forge were also among the top gainers, rallying up to 3%.
Mazagon Dock Shipbuilders informed exchanges about receiving the Letter of Intent (LOI) from the European client on Monday after market hours.
With today’s gains, the stock has broken its three session losing streak. At 10:20 am, over 11.50 lakh shares changed hands on the NSE with the total traded value standing at Rs 25,1.52 crore.
Momentum indicators RSI and MFI suggest day’s levels at 44 and 48, respectively, hinting that there was further upside in the stock. Mazagon Dock shares are also trading above their 50-day and 200-day moving averages.
The multibagger stock has given returns of a whopping 250% over the past 12 months outperforming the Nifty50 which has given nearly 14% returns during this period.
On a year-to-date basis, the returns are to the tune of 176%.
The surge has not been without its share of volatility in the counter as Mazagon Dock has traded with a 1-year beta of 1.9 according to Trendlyne data.
The surge in most defense stocks has been on the back of the government's growing focus on the domestic sector and making things indigenously.
Meanwhile, the overall markets traded in the green which aided sentiments for the defense stocks.
