Shares of Avic Chengdu Aircraft, a prominent player in the Chinese defense sector, experienced a significant downturn on May 13. This decline came in the wake of a strong statement by Indian Prime Minister Narendra Modi, celebrating the successful completion of Operation Sindoor. As Modi’s remarks reverberated, Chinese defense stocks plummeted, while Indian defense shares thrived.

Avic Chengdu Aircraft Faces Selloff

On Tuesday, the stock price of Avic Chengdu Aircraft plummeted by 9.31%, reaching an intraday low of 86.93 yuan. By 1:15 PM IST, the shares were still struggling, down 7.51% at 88.66 yuan. Notably, this drop followed a dramatic surge of over 60% since the launch of Operation Sindoor on May 6.

• Key Details:
  • Stock fell to 86.93 yuan
  • Intraday trading saw a loss of 9.31%
  • Recovery since May 6 saw a rise of 60%

PM Modi’s Strong Message

In his address, PM Modi issued a stern warning to Pakistan, asserting that India would not yield to nuclear threats. He emphasized that terrorism and trade cannot coexist, reinforcing India’s commitment to national security. Modi passionately praised India’s air defense capabilities, stating, “The world witnessed how Pakistan’s drones and missiles were neutralized by our robust defense systems.”

He characterized Operation Sindoor as a new approach to countering terrorism, promising that future operations would depend on Pakistan’s actions.

Market Reactions and Future Predictions

Anshul Jain, Head of Research at Lakshmishree Investment, noted that Avic Chengdu Aircraft shares had previously surged from 73 yuan to 97.55 yuan. However, following the rapid increase, a phase of profit-taking has occurred, prompting speculation that the stock might retest its breakout zone around 73 yuan.

• Market Insights:
  • Potential retest of 73 yuan
  • Traders should monitor for signs of stability at this level
  • A pullback could provide a buying opportunity if demand returns

Jain emphasized the importance of observing price movements near the 73 yuan mark for any reversal signs, suggesting that this could represent a well-defined risk opportunity for traders.

In conclusion, the fluctuations of Avic Chengdu Aircraft’s stock highlight the volatile intersection of defense, geopolitics, and market sentiment. As the situation evolves, investors will be keenly watching both geopolitical developments and stock performance.