Dassault Aviation, the French aerospace giant behind the Rafale fighter jets, saw its stock price plunge 7% on May 12, following reports that India used Rafale aircraft in Operation Sindoor against Pakistan.
Dassault Aviation Faces Market Volatility
Dassault’s shares dropped to EUR 292, fluctuating between EUR 291 and EUR 295, marking a 10% decline over the past five trading sessions. This comes despite the stock’s strong performance earlier, when it surged 1.75% on May 8, closing at EUR 325.8, after reports of precision strikes on terror hubs inside Pakistan.
Market analysts suggest that India-Pakistan tensions have triggered investor caution, leading to the sell-off in Dassault shares.
Chinese Jet Maker Chengdu Aircraft Corporation (CAC) Surges
While Dassault faced a downturn, China’s Chengdu Aircraft Corporation (CAC), the manufacturer of J-10 fighter jets, saw its stock price soar by 20% on May 12, reaching CNY 95.86.
The J-10C fighter jet, recently inducted by Pakistan, has gained attention amid rising tensions, fueling investor confidence in CAC.
India’s Defence Expansion and Rafale Deal
Despite the stock dip, Dassault remains a key player in India’s defence sector, with India recently signing a ₹63,000 crore deal to procure 26 Rafale Marine jets for the Indian Navy’s aircraft carrier INS Vikrant.
Market Outlook and Investor Sentiment
Experts warn that if Dassault’s stock falls below EUR 291, it could drop further to EUR 260, urging investors to exercise caution. However, the long-term demand for Rafale jets remains strong, especially given their combat success in Operation Sindoor.
With geopolitical tensions influencing defence stocks, investors are closely watching India’s military strategy and global defence market trends.
