New Delhi, May 15: Chinese defence firm Avic Chengdu Aircraft, the maker of J-10 fighter jets which were used by Pakistan against India during the conflict, has seen its share price crashing almost 12 per cent.
The sharp drop in its stock came after the Prime Minister Narendra Modi’s speech upon the successful completion of ‘Operation Sindoor’ which resulted in a decisive victory for India. Shares of Chinese defence companies faced a heavy selloff this week while Indian defence sector stocks surged.
From Monday’s close of 95.86 yuan per share levels, Avic Chengdu Aircraft stock has declined by over 11.50 per cent. On Thursday, the Chinese defence company’s stock was trading at 85.20 yuan per share after touching an intra-day low of 85, over 11.50 per cent dip in three successive days.
Earlier, the shares of Zhuzhou Hongda Electronics Corp Ltd, the Chinese defence company that manufactures the PL-15 missile, dropped sharply, after India’s air defence system successfully intercepted and destroyed the missile during the conflict with Pakistan.
The stock plunge came after Indian defence forces confirmed that the PL-15 missile, supplied to Pakistan by China, failed to penetrate the country’s multi-layered air defence system.
The PL-15, a beyond-visual-range (BVR) air-to-air missile used by Pakistan’s JF-17 and J-10 fighter jets, was neutralised by indigenous defence systems. This interception has raised questions about the real-world effectiveness of China’s missile technology, possibly triggering the decline in investor confidence in Zhuzhou Hongda. Earlier, Chinese defence stocks surged before the ceasefire, fuelled by investor optimism that Beijing would emerge as a key arms supplier to Pakistan if the conflict dragged on.
On the other hand, the Indian defence sector has witnessed a sharp rise in its market capitalisation, gaining an impressive Rs 86,211 crore since the Pahalgam terror attack, which claimed 26 lives.
The Nifty India Defence Index, which tracks the performance of leading defence stocks, has gained 9.39 per cent since the start of the military action, a remarkable contrast to the 1.98 per cent increase in the benchmark Nifty during the same period.
The surge in the sector has also been reflected in the market capitalisation contributions of major players. Bharat Electronics Ltd (BEL) has added Rs 23,683 crore to the sector’s market value, while Hindustan Aeronautics Ltd (HAL) and Bharat Dynamics have contributed Rs 21,654 crore and Rs 12,345 crore, respectively.
Other companies, such as Mazagon Dock Shipbuilders and Solar Industries, have also played a significant role in the overall market cap gain, contributing Rs 9,971 crore and Rs 6,859 crore, respectively.
IANS