Indian-Pakistan Conflict Impacts Stock Markets: Dassault Aviation Falls, Chengdu Aircraft Corporation Rises
Dassault Aviation Shares Take a Hit
Shares of Dassault Aviation, the French company behind the Rafale fighter jets, have experienced a downturn in recent days. The stock dropped by 7% on Monday, reaching EUR 292 during intraday trading, after fluctuating between EUR 291 and EUR 295.
This dip comes amidst heightened tensions between India and Pakistan following a recent airstrike by India targeting terrorist infrastructure in Pakistan. Some reports suggest that India utilized Rafale jets armed with SCALP cruise missiles and HAMMER munitions during this operation, known as ‘Operation Sindoor.’
While Dassault Aviation’s stock had initially surged following the operation, it has since fallen over 10% in the past five trading sessions. Anshul Jain, head of research at Lakshmishree Investment and Securities, attributes this volatility to the ongoing India-Pakistan news cycle, stating that the stock has tested its swing low support zone.
Chengdu Aircraft Corporation Sees a Surge
On the other hand, shares of Chengdu Aircraft Corporation (CAC), the Chinese company responsible for manufacturing the J-10 fighter jets recently inducted by Pakistan, have skyrocketed. On May 12, CAC’s stock surged by 20%, reaching Chinese Yuan 95.86, marking a 60% increase from the previous week.
This strong performance is believed to be driven by investor confidence in CAC’s products, particularly the J-10C fighter jet, which is the latest iteration of the J-10 fighter. The J-10, nicknamed the ‘fierce dragon’ (Menglong), has been in service with the Chinese military since 2003 and was recently exported to Pakistan in 2022.
The rise in CAC’s stock price reflects a broader trend of increased demand for Chinese military equipment in the region.
India and France’s Rafale Deal
Adding another layer to this story, India and France recently finalized a major deal for 26 naval variants of the Rafale fighter jets. This ₹63,000 crore deal will see the Indian Navy acquire the jets for deployment on board INS Vikrant, India’s first indigenous aircraft carrier.
The Indian Air Force currently operates 36 Rafale fighters equipped with Hammer and SCALP missiles. India already has established infrastructure for Rafale maintenance, repairs, training, and simulators at its Ambala air base.
