Rafale Maker Stock Rises Amid Geopolitical Tensions
Rafale Maker’s Stock Takes Flight
Shares of Dassault Aviation, the company behind the Rafale fighter jets, have experienced a significant surge following Prime Minister Narendra Modi’s recent address to the armed forces. The stock climbed over 1.47% on Wednesday, May 14, reaching an intraday high of EUR 304.40 on the Paris Stock Exchange. This rally comes after a 7% drop on Monday, May 12.
The recent boost in investor confidence is largely attributed to geopolitical developments. India’s ‘Operation Sindoor,’ in which Rafale jets reportedly targeted terror infrastructure in Pakistan, has injected a sense of positive momentum into the market.
A Message of Strength
Prime Minister Modi’s speech, delivered from the Adampur Air Base just 100 km from the Pakistan border, sent a strong message of deterrence. He emphasized India’s unwavering resolve against terrorism, declaring, “India’s Lakshman Rekha against terrorism is now crystal clear. India will respond and definitely respond if hit by a terror attack.”
Experts suggest that this assertive stance, coupled with the success of Operation Sindoor, has contributed to the upward trend in Dassault Aviation’s stock price.
Strong Fundamentals Back the Surge
Beyond geopolitical factors, Dassault Aviation’s strong financial performance is also playing a role in the stock’s success. The company reported €6.24 billion in annual revenue and a net profit of €924 million, aligning with the growth observed in the broader French Aerospace & Defence sector.
While the stock experienced some volatility in recent days, its overall performance remains robust, with a year-to-date gain of 66.7% as of May 8.
Contrasting Performance in China
In contrast to Dassault Aviation’s uptick, shares of AVIC Chengdu Aircraft Corporation, the Chinese company behind the J-10 fighter jets used by Pakistan, surged by 20% on May 12. This suggests a potential shift in investor sentiment towards Chinese aerospace companies following Operation Sindoor.
