Defence stocks rally up to 20% after Pakistan says Indian military incursion is imminent

Shares of Indian defence companies surged up to 20% on Tuesday, April 29, after Pakistan’s Defence Minister Khawaja Muhammad Asif said a military incursion by India was imminent, following a deadly terrorist attack on tourists in Pahalgam last week.

The attack, which took place on April 22, killed 26 civilians and sparked outrage in India, with strong calls for retaliation. India has accused Pakistan of supporting the attackers, calling it the worst civilian attack in years.

"We have reinforced our forces because it is something which is imminent now. In such a situation, some strategic decisions have to be taken, and those decisions have been made," Defence Minister Khawaja Muhammad Asif told Reuters in an interview at his office in Islamabad.



He added that India’s rhetoric was intensifying and that Pakistan’s military had briefed the government on a possible Indian assault, although he did not provide further details.

Following the Pahalgam attack, India said two suspected terrorists were Pakistani nationals. Islamabad has denied any involvement and called for a neutral investigation.

Prime Minister Narendra Modi has vowed to pursue and punish the attackers.

Pakistan remains on high alert, but Asif said the country would only consider using nuclear weapons if there were “a direct threat to our existence.”

Since the attack, India has downgraded diplomatic ties with Pakistan, suspended the Indus Waters Treaty, shut the main land border crossing, and cancelled visas for Pakistani nationals.

Meanwhile, Paras Defence led the gains on the Nifty India Defence index, ending 20% higher. Shares of PSU shipbuilders GRSE, Cochin Shipyard and Mazagon Dock were up between 9-12% each while HAL, Bharat Electronics and Bharat Dynamics ended 4% higher.

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The Nifty India Defence index climbed over 5% on Tuesday and has surged more than 9% over the past two trading sessions.

On Monday, the Indian government also banned more than a dozen Pakistani YouTube channels, including those of news outlets such as Dawn, Samaa TV, ARY News, Bol News, Raftar, Geo News, and Suno News, citing “provocative” content.

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