After India’s decisive display of military technology and success of indigenous air defence during Operation Sindoor, key Chinese defence firms continue to witness sharp losses, dampening investor sentiment in Beijing.
May 15, 2025: Beijing / Hong Kong:
Chinese defence stocks extended their losing streak for the third straight session, reacting to strong messaging from Indian leadership after the successful conclusion of Operation Sindoor. The Hang Seng China A Aerospace & Defence Index dropped 1.16% on Thursday, with nearly all constituent stocks trading in the red.
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Shares of major defence manufacturers, including China Aerospace Times Electronics, Bright Laser Technologies, North Industries Group Red Arrow, Xi’an Triangle Defense, China Spacesat, Beijing Bei, and AVIC Aircraft, fell between 1% and 4% in early trade.
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This comes after AVIC Chengdu Aircraft, maker of Pakistan’s J-10 fighter jets, suffered a 9.5% drop over two days following Prime Minister Narendra Modi’s speech detailing India’s swift and technologically superior retaliation against Pakistan-based terror camps.
Modi’s Message Hits Market Nerves
The sharp correction marks a shift in investor sentiment that had earlier rallied on hopes of increased Chinese arms exports to Pakistan. However, Modi’s address and India’s emphasis on self-reliant defence systems appear to have disrupted that momentum.
“The world saw how Pakistan’s drones and missiles fell like straws in front of India,” PM Modi said. “India’s strong air defence system destroyed them in the sky itself.”
India’s Akash Surface-to-Air Missile (SAM) system and electronic warfare platforms, credited with neutralising multiple incoming threats from Pakistan—including Chinese-made missiles and drones—were hailed as a game-changer. These developments have cast doubt over the performance and reliability of Chinese-manufactured systems used by Pakistan during the conflict.
Defence Stocks Under Pressure
Ashwini Shami, EVP at OmniScience Capital, noted:
“The success of Indian systems like Akash SAM and indigenous EW platforms has not only proven their reliability but also made a strong case for India’s defence exports. The global market is taking note, especially given their performance against Chinese hardware.”
The broader HSCCAD Index has now declined over 3% in the past week. Analysts say technical pressure and lack of buying interest near the upper resistance level of 4,500 has capped the index’s upside for now.
Strategic Fallout and Future Outlook
Meanwhile, Dassault Aviation, maker of the Rafale jets used in India’s operation, also saw volatility amid the ceasefire declaration. However, market observers believe that India’s growing credibility as a defence manufacturer may gradually eat into China’s export-dependent defence market, especially in South Asia and the Middle East.
Modi concluded his address with a warning:
“Operations are paused, not concluded. The future depends on Pakistan’s conduct. This is the new normal.”
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Chinese defence stocks fall, Hang Seng Aerospace Index, India Operation Sindoor, AVIC Aircraft, J-10 fighter jet, Modi airstrike speech, Akash SAM system, Indian defence exports, China-Pakistan military ties, Chinese arms market crash, OperationSindoor,