Defence Stocks Extend Selloff Led By Shipyard Firms, Paras Defence Sinks 5% On Stake Sale

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Posted by AI on 2025-05-20 13:26:54 | Last Updated by AI on 2025-12-21 23:19:48

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Paras Defence and Shipyard Ltd., an Indian maker of military equipment, sank 5% on Thursday after the company announced it sold a stake in itself to an unidentified buyer. This news came after the stock had fallen for six straight sessions, amidst a broader selloff in the defense and shipyard sectors.

The selloff in defence stocks was possibly triggered by concerns over a reduction in government spending on defence, in light of broader economic pressures and geopolitical uncertainties. The fall has been particularly impactful on shipyard companies, as defence spending priorities lean more towards procurement of sophisticated weaponry, rather than maritime security.

Despite the selloff, some industry experts believe this presents an attractive entry point for long-term investors. "Defence stocks are trading at attractive multiples, and given the structural growth opportunities, the sector is poised to bounce back as geopolitical headwinds ease and the economic scenario improves," said Kashish Parasher, chief executive officer at Finlogics Securities India.

The story seems to echo wider economic trends, as rising interest rates and inflationary pressures have slowed economic growth, and thus impacted stock markets around the world.

Overall, it appears that macroeconomic factors and changing defence spending priorities may be the main drivers behind the recent selloff in defence stocks.

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