Chinese Defence Shares Tumble As Indian Market Surges Post-Operation Sindoor

Shares of Chinese defence manufacturer Avic Chengdu Aircraft, known for producing the J-10 fighter jets used by Pakistan during the recent conflict, have fallen sharply—dropping nearly 12 per cent following Prime Minister Narendra Modi’s remarks celebrating the success of Operation Sindoor.

The steep decline in Avic Chengdu’s stock followed India’s declaration of a decisive victory in the operation.

The company’s shares fell from Monday’s closing price of 95.86 yuan to 85.20 yuan by Thursday, after touching an intra-day low of 85.

This marked a three-day fall of over 11.5 per cent.

Chinese defence stocks witnessed broader sell-offs this week, in contrast to notable gains in Indian defence shares.

Among other major declines, Zhuzhou Hongda Electronics Corp Ltd—manufacturer of the PL-15 missile—also suffered a sharp drop.

This came after the Indian Armed Forces confirmed that the PL-15, supplied by China to Pakistan, failed to breach India’s multi-layered air defence system.

The PL-15, a beyond-visual-range (BVR) air-to-air missile used by Pakistan’s JF-17 and J-10 fighter jets, was intercepted and neutralised by Indian indigenous systems.

This interception has raised questions about the real-world reliability of Chinese missile technology, contributing to declining investor confidence in Zhuzhou Hongda.

Prior to the ceasefire, Chinese defence companies had seen surging share prices, driven by expectations that prolonged conflict could strengthen Beijing’s role as a major arms supplier to Pakistan.

Indian Defence Sector Sees Sharp Rise

In contrast, the Indian defence sector has witnessed significant growth, adding Rs 86,211 crore in market capitalisation since the Pahalgam terror attack, which claimed 26 lives.

The Nifty India Defence Index has risen by 9.39 per cent since the beginning of military operations, far outpacing the benchmark Nifty’s 1.98 per cent increase during the same period.

Leading firms have played a major role in this surge. Bharat Electronics Ltd (BEL) topped the gains, contributing Rs 23,683 crore to the sector’s value, followed by Hindustan Aeronautics Ltd (HAL) with Rs 21,654 crore and Bharat Dynamics with Rs 12,345 crore.

Mazagon Dock Shipbuilders and Solar Industries have also posted strong performances, raising their market value by Rs 9,971 crore and Rs 6,859 crore, respectively.

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