The stock of Avic Chengdu Aircraft Co Ltd, a Chinese defence company, has surged by 36.21% in just two days, with a 44% increase over the past month. This sharp rise in the company’s share price is occurring amid rising India-Pakistan tensions, particularly following India’s recent Operation Sindoor, which involved a missile strike on nine terror camps in Pakistan and Pakistan-occupied Kashmir (PoK).
Avic Chengdu Aircraft is known for manufacturing fighter jets such as the JF-17 Thunder and J-10C Vigorous Dragon, both of which are used by the Pakistan Air Force. On Thursday, the company’s stock rose by 16.37%, following a 17% jump the previous day, to 80.68 yuan. This movement comes amidst widespread reports related to the India-Pakistan military conflict, although claims that Pakistan shot down Indian jets were later debunked by fact-checkers.
The surge in Avic Chengdu's stock may be linked to market sentiment regarding the increased demand for defense equipment, as heightened tensions typically drive expectations of military spending. Additionally, such stock movements often reflect speculation in response to geopolitical developments.
In contrast, Pakistan’s stock market took a hit following the Indian airstrikes, with the Karachi 100 Index falling by 3.13%, or 3,559.48 points, closing at 1,10,009.03 on Wednesday. However, Indian markets showed resilience, with both the Sensex and Nifty ending in positive territory.
Despite the ongoing conflict, market experts remain relatively optimistic about India's economic outlook. Emkay Global believes that while tensions may lead to short-term volatility, India’s market fundamentals remain strong. It predicts a 7% growth for the Nifty in FY26 and suggests that small and mid-cap stocks may outperform in the near term.
Pankaj Singh, Founder of SmartWealth.ai, echoed a similar sentiment, noting that although short-term caution is expected, Indian markets have historically shown strong recovery after such incidents. He emphasized that investors should focus on business fundamentals rather than being swayed by short-term geopolitical concerns.
