India-Pakistan tensions: Defence stocks in India and China tell an interesting tale after the India-Pakistan ceasefire. Post the Pahalgam terror attack, India launched Operation Sindoor to target terrorist camps in Pakistan and Pakistan occupied Kashmir. The neighbouring country’s resulting drone attacks led to India striking several of their air bases.Pakistan extensively made use of Chinese weapons, fighter aircraft and air defence systems in its attempt to stop India’s strikes. India on the other hand used a lot of indigenous defence systems which helped it strike Pakistan’s assets with precision.China Defence Stocks PlungeIn Shenzhen, Avic Chengdu Aircraft Co., which manufactures the J-10C fighters used by Pakistan, has seen a significant 9% decline over three trading sessions. Similarly, Zhuzhou Hongda Electronics Corp, producer of PL-15 air-to-air missiles, suffered a 10% fall, according to an ET report.Also Read | India’s defence exports surge to record high of Rs 23,622 crore in FY25; 34-fold increase from 2013-14The downward trend continued across other Chinese defence firms as well. China Aerospace Times Electronics recorded a 7% fall in two days, whilst Bright Laser Technologies, North Industries Group, China Spacesat and AVIC Aircraft witnessed declines between 5-10%. This occurred after satellite imagery contradicted Pakistani claims about damaging Indian airbases whilst confirming Indian Air Force’s precise strikes on Pakistani facilities.India’s Defence Stocks SurgeMeanwhile, investors are actively buying into Indian defence stocks following India’s Operation Sindoor, which showcased the nation’s military capabilities supported by indigenous weapons and advanced domestic technology.The Nifty India Defence Index has recorded a remarkable 10% increase over three days, whilst companies like IdeaForge, GRSE, Cochin Shipyard, and Bharat Dynamics experienced substantial growth of up to 38% within a week.
Defence stocks on strong footing
“With India achieving all its avowed strategic objectives, Operation Sindoor was an unequivocal success… a success powered by home-grown weapons and cutting-edge domestic technologies,” said Dr. Manoranjan Sharma, Chief Economist at Infomerics Valuation and Ratings Ltd. “The rally in defence stocks is on,” he said according to an ET report. Defence sector stocks haveexperienced significant gains with Cochin Shipyard, Bharat Dynamics, Mazagon Dock Shipbuilders, and Paras Defence and Space Technologies recording increases ranging from 10% to 35% since April 22, following the Pahalgam terrorist incident that sparked military tensions between India and Pakistan. The Nifty India Defence index registered a nearly 13% increase as market participants anticipated potential increases in government defence allocations.Also Read | India-Pakistan ceasefire: How India’s punitive measures will continue to hit Pakistan’s fragile economy – explained“Post the recent cross-border tension between India and Pakistan, defence stocks moved in anticipation that India will have to not only replenish its inventory of equipment but also order new ones to keep up its technological edge,” said Mahesh Patil, CIO, Aditya Birla Sun Life AMC.The heightened border situation could potentially accelerate defence budget increases in the forthcoming years. Additionally, this situation presents opportunities for India to expand its defence equipment exports to other nations.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
