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Chinese Defence Stocks: On May 13, the Hang Seng China A Aerospace & Defence Index traded 3 percent lower so far.
Chinese stock market down up to 8% after India-Pakistan ceasefire.
Chinese Defence Stocks: Chinese defense stocks faced significant selling pressure on Tuesday following the India-Pakistan ceasefire. The ceasefire agreement, reached on May 10, included an immediate halt to all firing and military actions on land, air, and sea after four days of intense cross-border drone and missile strikes.
India launched Operation Sindoor, targeting 21 terror camps in Pakistan and Pakistan-occupied Kashmir. In response, Islamabad unleashed a series of drone and missile attacks on civilian and military targets across Jammu, Punjab, and Rajasthan during the night of May 7 and into May 8.
India’s advanced air defense systems intercepted Pakistan’s strikes, which heavily relied on Chinese weaponry, such as China-made drones, missiles, and air defense systems. This highlighted Islamabad’s growing military dependence on Beijing.
Impact on Chinese Defense Stocks
After the cessation of hostilities, shares of major Chinese defense firms experienced a sharp downturn. On May 13, the Hang Seng China A Aerospace & Defence Index traded 3 percent lower. Key constituents AVIC Chengdu and Zhuzhou Hongda saw declines of 8.6 percent and 6.3 percent, respectively.
AVIC Chengdu Aircraft, the manufacturer of the J-10C fighter jet, traded 8.6 percent lower. Pakistan’s Foreign Minister Ishaq Dar confirmed in Parliament that Chinese-made J-10C fighter jets were used in the engagement.
The Aviation Industry Corporation of China (AVIC) is a large state-owned aerospace and defense conglomerate, encompassing many of the design bureaus and manufacturing plants responsible for China’s aircraft and airborne weaponry.
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