Rafale maker Dassault shares fall 9%; China's jet manufacturer sees stock soar amid India-Pak tensions

Dassault Aviation, the French aerospace manufacturer of Rafale fighter jets, recorded a sharp 7% intraday decline in stock value on May 12, falling to EUR 292. Prices fluctuated between EUR 291 and EUR 295 throughout the trading session. This drop comes days after reports that India deployed Rafale jets during Operation Sindoor, a precision airstrike targeting terrorist infrastructure approximately 200 km inside Pakistan on May 7.

Before the decline, Dassault Aviation shares had climbed 1.75% on May 8 to close at EUR 325.8. Since the beginning of the year, the stock had risen by 66.7%, from EUR 195.90 on December 31. However, in the past five trading sessions, the stock has fallen over 10%. Dassault Aviation reported annual sales of EUR 6.24 billion and a net profit of EUR 924 million. The broader French Aerospace and Defence sector recorded a 17.7% growth over the past year.

Anshul Jain, head of research at Lakshmishree Investment and Securities, stated that the stock had tested its swing low support zone of EUR 292–291. “A decisive break below this level could quickly drag the stock toward the EUR 260 zone. Caution is advised for long positions,” Jain said. He added that traders should wait for a breakdown confirmation before initiating new short positions, and that defensive positioning and tight risk management are recommended.

In contrast, shares of Chengdu Aircraft Corporation (CAC), the Chinese aerospace company that manufactures the J-10 fighter jets used by Pakistan, surged by 20% on May 12 to reach 95.86 Chinese Yuan. This marks a 60% increase compared to the previous week. CAC’s stock price was 59.23 Yuan on May 6, hit a high of 88.88 Yuan within three days, and later closed at 79.88 Yuan on May 9 after profit-booking sales, still up 35% from May 6 levels.

India recently finalised a government-to-government deal to procure 26 Rafale Marine fighter jets from Dassault Aviation for the Indian Navy at a cost of around ₹63,000 crore. The Cabinet Committee on Security, led by Prime Minister Narendra Modi, approved the purchase of 22 single-seat Rafale M fighters and 4 twin-seat trainer jets. These aircraft will be deployed on India’s aircraft carrier INS Vikrant. The Indian Air Force already operates 36 Rafale jets equipped with SCALP and HAMMER missiles and has maintenance and training facilities at the Ambala air base.