Mumbai, Sept. 8 -- Shares of defence companies rallied on Tuesday after the government on Monday cleared defence acquisition proposals worth about Rs 1.10 lakh crore, with 98 per cent of the procurement value earmarked to be sourced from Indian industry.

The development boosted investor sentiment towards the domestic defence sector, as the large procurement approvals are expected to create a strong order pipeline for Indian defence manufacturers.

The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, on Monday granted Acceptance of Necessity (AoN), which is the government's in-principle approval to move ahead with various defence purchases for the Army, Navy and Air Force.

The positive sentiment was reflected...