J-10 Jet Maker Stock Takes a Hit Amidst Rising Geopolitical Tensions
Shares of Avic Chengdu Aircraft, the Chinese company that manufactures the J-10 fighter jets used by Pakistan’s air force, have taken a dip following India’s Operation Sindoor and Prime Minister Narendra Modi’s firm message against terrorism.
Volatile Trading
Avic Chengdu Aircraft’s stock price has been on a roller coaster ride in recent days, falling in two out of the last three trading sessions. On Thursday, the stock opened 3% lower than its previous close and continued to decline, ultimately dropping 6.30% to reach a low of 84.65 yuan. Over the course of these three sessions, the stock has shed nearly 12% of its value.
Geopolitical Concerns
Dr. Ravi Singh, SVP—Retail Research at Religare Broking Ltd, attributes the sharp sell-off to geopolitical tensions fueled by the India-Pakistan border conflict and the spread of misinformation. These tensions have impacted the stock despite a remarkable 43.83% surge in May, driven by the deployment of J-10 fighter jets by Pakistan amidst escalating tensions with India.
Technical Analysis and Outlook
Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, believes that Avic Chengdu Aircraft is currently trading in an overbought zone and expects limited gains in the near term. He points to a ‘double top’ pattern on the weekly chart, which suggests a potential reversal and warns traders to exercise caution. Dongre sees immediate support for the stock at 76 yuan and predicts a potential drop to the 60–65 range if this level is breached. He advises traders to wait for a dip closer to the stronger support zone before considering long positions.
Modi’s Strong Stance
Prime Minister Modi recently warned Pakistan against nuclear blackmail and emphasized that India’s Operation Sindoor marks a new policy against terrorism and a commitment to justice. Modi stated that India had been holding back its operations against Pakistan, but the future would depend on Pakistan’s actions.
Operation Sindoor: India’s Response
Operation Sindoor was India’s response to a terror attack on civilians in Pahalgam, Kashmir, on April 22, which claimed the lives of 26 people. India conducted precision strikes on terror infrastructure on May 7, following which Pakistan attempted to attack Indian military bases on May 8, 9, and 10. The Indian defence ministry reported that the Indian Air Force successfully bypassed and jammed Pakistan’s Chinese-supplied air defence systems, completing the mission in 23 minutes and showcasing India’s technological superiority.
