Chinese Defence Stocks Tumble Nearly 9% After PM Modi’s National Address
The shares of Chinese defence firm AVIC Chengdu and Zhuzhou Hongda witnessed a significant plunge of nearly 9% today.
- Republic Business
- 2 min read
The shares of Chinese defence firm AVIC Chengdu and Zhuzhou Hongda witnessed a significant plunge of nearly 9% today.
India-Pakistan Conflict
On May 10, both India and Pakistan reached an understanding to immediately halt all firing and military actions on land, air, and sea, after four continuous days of cross-border drone and missile strikes.
India had launched Operation Sindoor as a retaliatory action targeting terror camps in Pakistan and pakistan-occupied Kashmir (PoK), to which Islamabad had responded with several drone attacks towards India.
The advanced air defence systems of India carefully intercepted these strikes which were launched by Pakistan, relying heavily on Chinese weaponry, including China-made drones as well as missiles.
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Why Did Chinese Defence Stocks Tumble?
However, the defence stocks of China declined due to factors like the agreed-upon ceasefire between India and Pakistan as well as Prime Minister Narendra Modi's national address on May 12, 2025.
The shares of major defence firms in China took a major downturn as the Hang Seng A Aerospace & Defence Index n May 13 traded 3% lower.
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Companies like AVIC Chegdu and Hongda were trading 8.6% and 6.3%, respectively.
AVIC Chengdu aircraft is the manufacturer of J-10C fighter jets, which were used for attacking Indian fighter jets.
Zhuzhou Hongda Electronics Corp Ltd makes PL-15 missiles, which were also used by the Pakistan army in these attacks.
Modi's speech triggered the downfall in these shares as at the same time Indian defence stocks saw an uptick.
In his address, Modi warned Pakistan that India will not bow down to nuclear threats, adding that terror and trade talks cannot go hand in hand.
PM Modi further praised the Indian Air Forces for their effectiveness during Operation Sindoor.