Dassault Aviation, the French manufacturer of Rafale fighter jets reportedly used by India in the recent ‘Operation Sindoor’ against Pakistan, witnessed a sharp decline in its stock on the European market. On Monday, Dassault’s shares dropped by 7% intraday to EUR 292, fluctuating between EUR 291 and EUR 295 throughout the session.
In contrast, shares of China’s Chengdu Aircraft Corporation (CAC)—the maker of J-10 jets, which are in service with the Pakistan Air Force—saw a substantial 20% surge on May 12. CAC’s stock soared to CNY 95.86, marking a 60% increase from the previous week, indicating a significant boost in investor confidence.
According to Live Mint, Dassault Aviation had initially seen a rally in its stock following India’s precision airstrike, Operation Sindoor, carried out on May 7. The Indian Air Force is reported to have used Rafale jets equipped with SCALP cruise missiles and HAMMER bombs in the strike, which hit targets about 200 kilometers within Pakistani territory without breaching its airspace.
Despite Dassault’s strong financials—including annual sales of EUR 6.24 billion and a net profit of EUR 924 million—and a broader 17.7% growth in France’s Aerospace & Defence sector over the past year, the stock has declined more than 10% over the last five trading sessions. It had reached EUR 325.8 on May 8, posting a year-to-date gain of 66.7% from its December 31 closing price of EUR 195.90.
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, noted that heightened geopolitical tensions have introduced significant volatility. He warned that a breach below the EUR 291–292 support range could drive the stock down toward EUR 260, advising traders to remain cautious and prioritize risk management.
Meanwhile, India has finalized a major defence agreement with France to acquire 26 Rafale Marine fighter jets for approximately ₹63,000 crore. The purchase includes 22 single-seat Rafale-Ms and four twin-seat trainers, to be deployed on India’s aircraft carrier INS Vikrant. The Indian Air Force already operates 36 Rafales, supported by maintenance and training infrastructure at Ambala Air Base.
CAC’s Stock Rally Driven by Conflict
Chengdu Aircraft Corporation’s stock price climbed rapidly in the wake of the India-Pakistan conflict. On May 9, it reached CNY 88.88, up 50% from CNY 59.23 on May 6. Despite some profit-booking leading to a slight drop to CNY 79.88, the price remained 35% higher than its May 6 level.
Analysts attribute this rise to increased attention on CAC’s J-10C fighters, an upgraded variant of the original J-10. Developed by Chengdu Aircraft Industry Group and nicknamed the “Fierce Dragon” (Menglong), the J-10 first flew in 1998 and entered service with the Chinese People’s Liberation Army Air Force in 2003. The advanced J-10C version was operational by 2018, and Pakistan began receiving exports in 2022.
