Defence stocks turn positive in wake of cabinet reshuffle

The third cabinet reshuffle by Prime Minister Narendra Modi has ushered in many changes that could create a positive bias for the equity markets, say market experts. The market has welcomed the government’s reshuffle with defence stocks, including Reliance Defence, Bharat Electronics and Sika Interplant Systems, showing positive undertones. Nirmala Sitharaman is now the first full-time woman defence minister and the second woman to hold this post after Indira Gandhi, who held it as an additional charge. 
 
India’s private players in the defence sector are likely to receive fresh orders from the full-time defence minister boosting their margins. The government intends to develop strategic defence partnership models, speed up economic diplomacy, and improve ties with China and Pakistan as part of its defence and foreign policy. Arun Jaitley, who earlier held the defence portfolio as additional charge, will continue to be the Minister of Finance and Corporate Affairs. Suresh Prabhu is now Minister of Commerce and Industry and Piyush Goyal is Minister of Railways and Coal.
 
Nitin Gadkari has been appointed Minister of Road Transport and Highways, Minister of Shipping, and Minister of Water Resources, River Development and Ganga Rejuvenation. Petroleum minister Dharmendra Pradhan has been elevated to cabinet rank along with the charge of the Ministry of Skill Development and Entrepreneurship. With this reshuffle, policy execution may be fastened in the last leg of NDA’s tenure. Also, this might be the last reshuffle by the NDA government ahead of the 2019 Lok Sabha elections.