Shares of Chinese defence major Avic Chengdu Aircraft, the maker of J-10 fighter jets, have plunged over 9.5% in just two trading sessions, reacting sharply to Indian Prime Minister Narendra Modi’s strong message to Pakistan and the global community. This dramatic selloff comes after PM Modi hailed the success of Operation Sindoor and firmly declared that “terror and trade, terror and talks cannot go together.”
On Tuesday, the stock closed 7% lower at 88.74 yuan, and as of 9:30 AM IST today (May 14), it was trading at 90.65 yuan, reflecting investor nervousness about geopolitical risks tied to escalating India-Pakistan tensions. The correction follows a significant rally — Avic Chengdu’s shares had jumped over 60% since the onset of Operation Sindoor on May 6, before reversing sharply.
During his national address, PM Modi warned against any attempts of “nuclear blackmail” by Pakistan and showcased India’s advanced air defence capabilities, stating, “The world saw how Pakistan’s drones and missiles fell like straws in front of India.” He further described Operation Sindoor as a “new normal” in India’s counter-terrorism doctrine, signifying potential sustained military assertiveness.
The impact was felt across Chinese defence counters, many of which saw continued declines as Indian defence stocks surged, buoyed by the success of homegrown systems used in the operation.
Technical Outlook:
According to Ganesh Dongre, Senior Manager at Anand Rathi, Avic Chengdu’s stock is in an overbought zone on the weekly charts. A double-top pattern has emerged around the 90–95 yuan range, indicating a possible bearish reversal. Traders are advised to book profits and watch for a re-entry near the 65–70 yuan support zone.
Echoing a similar sentiment, Anshul Jain of Lakshmishree Investment noted that the stock’s sharp rise from its breakout at 73 yuan to nearly 98 yuan has triggered profit booking, and a pullback to the breakout zone looks probable.
Meanwhile, PM Modi’s address, apart from intensifying diplomatic rhetoric, appears to be influencing global defence market sentiment, especially among companies closely associated with Pakistan’s military ecosystem, like Avic Chengdu.
This episode marks a new chapter where geopolitical posturing is beginning to have tangible financial impacts — especially in the defence sector — across Asian markets.
