Why is China's J-10 jet maker Avic Chengdu Aircraft share price falling after Modi's strong message against terrorism?
Avic Chengdu Aircraft share price: The stock of Chinese defence company Avic Chengdu Aircraft, which manufactures the J-10 fighter jets used by Pakistan's air force against India, has come under selling pressure following the successful completion of India's Operation Sindoor and a strong-worded message by Prime Minister Narendra Modi regarding intolerance of any kind of terrorism.
Against this backdrop, Avic Chengdu Aircraft share price has seen a volatile few days, falling in two of the last three trading sessions. On Thursday, the Chinese defence stock opened at 87.74 yuan, down 3% from its last closing price of 90.35 yuan. It later extended losses, falling 6.30% to the day's low of 84.65 yuan.
In the three trading sessions, Avic Chengdu Aircraft share price has lost nearly 12% of its value.
However, despite the recent selloff, China's J-10 fighter jet maker's stock has rallied 43.83% in May alone amid the deployment of the jets by Pakistan's air force following increased tensions with India.
Barring the stellar rally in May, Avic Chengdu Aircraft share price has recorded back-to-back losses for four months, nosediving 19% during this period.
Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, believes that the Chinese defence stock is trading in an overbought zone and is likely to see limited gains in the near term.
'Avic Chengdu Aircraft is trading in the overbought zone on the weekly chart, indicating limited upside potential in the near term. The stock has established stiff resistance in the 90–95 range, where it has repeatedly failed to break out decisively. This price behaviour has led to a double top pattern, a classic bearish reversal signal, suggesting increased caution for traders,' Dongre said.
He sees immediate support for Avic Chengdu stock at the 76 mark. 'A closing below this level could trigger further correction, potentially dragging the stock down to the 60–65 range. Given the current technical setup, traders are advised to avoid fresh entries at the current levels and instead wait for a dip closer to the stronger support zone before considering long positions. Buying near the 60–65 range would offer a more favourable risk-reward opportunity,' advised Dongre.
The fall in Avic Chengdu Aircraft's share price, along with other Chinese defence stocks, comes following PM Modi's address to the nation, wherein he said that terror and trade, terror and talks, cannot go together.
PM Modi also warned Pakistan that India will not succumb to nuclear blackmail, adding that Operation Sindoor is India's new policy against terrorism and our unwavering pledge for justice.
"It is the new normal. We have only kept in abeyance our operations against Pakistan and the future will depend on their behaviour," Modi said in his address.
Operation Sindoor was India's response to the terror attack on civilians in Pahalgam, Kashmir, on April 22, which resulted in the death of 26 people. India carried out precision strikes on terror infrastructure early on May 7, following which Pakistan attempted to attack Indian military bases on May 8, 9 and 10.
India's defence ministry on Wednesday said the Indian Air Force bypassed and jammed Pakistan's Chinese-supplied air defence systems, completing the mission in just 23 minutes and demonstrating India's technological edge.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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