I am an Indian and there are other religions as well apart from Muslim here.I encounter many Hindu friends on daily basis and they always ask stupid question about Islam and Muslims like "Why we cut(Zibah) a speechless creature,a goat or camel?" How do I react to these questions?
React them as ordinary people of asking ordinary questions, but be kind.
Learn why you cut a creature, a goat or camel and then answer it kindly. I am sure you can differentiate a mocking question and a curious question. When they ask, remember first that your attitude will probably be perceived as common attitude of The Muslim World. So, don't swear or something whether they are annoying or not, you say just "Good question, I don't know, I will learn about this issue too." or "This is the answer and reason. You may not like it, but this is our perspective."
If they are just mocking and not seeking for an answer, I advise you to leave there in silence but not head down, just by saying "If you would curious really and be ready to learn, I will explain.".
Depending on the age of your friends you should be always be respectful to your elders. But I would have to say that you should at-least tell them polity to stop the jokes and if they don't just leave them alone. Try to ignore that fact that they are insulting Islam. Their intentions will be settled by Allah (SWT)