Shares of defence companies surged in afternoon deals on Wednesday after Prime Minister Narendra Modi announced that India entered into a select group of space powers that have the capability to target satellites.
Reacting to the news, shares of defence sector stocks such as Hindustan Aeronautics and Bharat Dynamics gained between 6-7 per cent on the local bourses.
The Prime Minister, in his address to the nation, said that India successfully shoot down a low-earth-orbit (LEO) satellite 300 kilometres from the planet through an anti-satellite weapon, A-SAT. "Till now, 3 countries of the world- America, Russia, & China had this achievement. India is the 4th country to have achieved this feat," said PM Modi.
Following the announcement, shares of state-owned Hindustan Aeronautics Limited (HAL) spiked as much as 7.25 per cent to Rs 775 in intra-day trade on the Bombay Stock Exchange. Paring some of early losses, shares of the company settled at Rs 739.20, up 2.30 per cent, against previous closing price of Rs 722.55.
According to data available with exchange, as much as 14,000 shares changed hand over the counter today as compared to two-week average of 5,370 shares.
On the National Stock Exchange, the stocks of the company ended 2.98 per cent higher at Rs 743.50 apiece. It touched an intra-day high and low of Rs 777 and Rs 722, respectively.The share price of Bharat Dynamics jumped 6.26 per cent to touch an intra-day high of Rs 300, against previous close level of Rs 282.30 on the BSE. The scrip closed trade at Rs 284, up 0.60 per cent.
Dhananjay Sinha, head-Institutional Research, Economist and Strategy at Emkay Global Financial Services said, "A higher probability of the current party coming back to power is something the market wants to play. The idea is that the rebound that we saw in 2014 (after Modi was elected) would replay. We'll have to see whether the same story can play with effectiveness."
Edited by Chitranjan Kumar