Modi’s Message on Indigenous Defense Wipes Billions from Chinese Stocks

Chinese defence stocks, including China Aerospace Times Electronics, AVIC Aircraft, and Bright Laser Technologies, have been experiencing a sharp decline following Prime Minister Narendra Modi's speech. The Hang Seng China A Aerospace & Defence Index dropped for the second consecutive session, losing 1.3%, with individual stocks falling between 1% and 4%.

One of the most notable declines was Avic Chengdu Aircraft, the manufacturer of J-10 fighter jets, which saw its share price plummet over 9% in two days. This downturn comes after India's Operation Sindoor, which showcased the effectiveness of indigenous defence systems like the Akash Surface-to-Air Missile (SAM) and electronic warfare systems.

PM Modi emphasized that Pakistan's drones and missiles were neutralized by India's air defence systems, reinforcing confidence in India-made defence equipment.

The Prime Minister's address reinforced confidence in India-made defense equipment, stating that Pakistan's drones and missiles were neutralized by India's air defense systems. This has led to investor skepticism about the reliability of Chinese defense exports.

Investors are reassessing the credibility of Chinese defense exports, especially after India's strong pushback against misinformation regarding airbase attacks. This has resulted in Chinese defense stocks tumbling upto now 9%.

The Hang Seng China A Aerospace & Defence Index has been on a downward trajectory, with major Chinese defense firms experiencing losses between 1% and 4.5%.

The market reaction suggests a shift in investor sentiment, with Indian defence stocks rallying while Chinese defence exporters face uncertainty.