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"Jet Wars and Market Shocks: How the Pakistan-India Conflict Triggered Share Fluctuations for J-10C and Rafale Manufacturers"
Nauman Hanif
May 14 2025 12:12 PM
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Following the Pakistan India air conflict 2025 and the recent India-Pakistan military escalation, claims have surfaced suggesting that the share value of China's Chengdu Aircraft Corporation — the manufacturer of the J-10 fighter jet — has risen (Chengdu Aircraft Corporation rises), while shares of France’s Dassault Aviation — the maker of the Rafale jet — have declined (Dassault Aviation stock drop). These claims gained momentum after Pakistan announced that it had shot down five Indian jets (Pakistan shoots down Indian jets), including three Rafales (Rafale jet downed), during the night between May 6 and 7. While India has not officially confirmed the loss of any aircraft (India denies aircraft losses), Indian Air Marshal A.K. Bharti acknowledged the situation vaguely by stating, "Losses are part of warfare" (Air Marshal AK Bharti's statement).  Verify confirms Rafale wreckage in three videos showing debris allegedly belonging to a French-made Rafale jet, which is operated by the Indian Air Force (French Rafale crash verification). Additionally, a U.S. official, speaking on the condition of anonymity, told Reuters that at least one of the downed Indian aircraft was indeed a Rafale (US confirms Rafale downing). A French intelligence official also confirmed this in a statement to CNN, further fueling the debate around Rafale losses in South Asia and sparking comparisons in the ongoing Rafale vs J-10 comparison amid rising geopolitical tensions in South Asia. Following the 2019 escalation between India and Pakistan, India acquired 36 Rafale fighter jets from the French company Dassault Aviation. Meanwhile, according to the London-based International Institute for Strategic Studies, Pakistan procured at least 20 Chinese J-10C fighter jets during the same period, which are equipped with Chinese-made PL-15 missiles. It’s worth noting that Pakistan Air Force’s Deputy Chief of Air Operations, Air Vice Marshal Aurangzeb, stated that JF-17s, F-16s, and J-10s participated in the recent air operations against India. However, he did not comment on whether Pakistan used the Chinese PL-15 missiles. Regardless of the ongoing debate over whether Pakistan shot down Indian jets, this report examines how the recent tensions have impacted certain Chinese, French, and Israeli defense companies that supply arms to both Pakistan and India



Indian Air Marshal AK Bharti simply said that 'casualties are part of war'


Chinese, French, and Israeli Companies Supplying Arms to Pakistan and India


On May 7, Bloomberg reported that during the tensions between India and Pakistan — a key episode in defense trade in South Asia — the share value of Chinese defense companies saw an increase, highlighting the deepening China-Pakistan defense cooperation. Meanwhile, CNBC’s May 8 report stated that the shares of Chengdu Aircraft Corporation J-10C, the company manufacturing the J-10C aircraft, had risen. It noted that its shares listed in Hong Kong increased by 6%, while in Shenzhen they jumped by 16%, marking the biggest surge since October. This development coincided with the day Pakistani officials claimed to have shot down several Indian jets — including Dassault Aviation Rafale jets — in response to India’s Operation Sandhoor, a flashpoint in Pakistan's weapons procurement and regional arms rivalry. Chengdu Aircraft Corporation (CAC), the manufacturer of the J-10C, is a Chinese aerospace group that also collaborated with Pakistan on producing the JF-17 Thunder China-Pakistan collaboration fighter jet. Its primary operations include the research, development, and export of aviation weaponry and equipment. So far, this group has developed military aircraft such as the J-5, J-7, J-9, J-10, J-20, and the Shenyang FC-31, supporting a strong Pakistan-China military alliance. China and Pakistan not only conduct joint military exercises, but Pakistan also relies heavily on Chinese military technology. According to a Stockholm International Peace Research Institute (SIPRI) report, 81% of Pakistan’s weapons imports over the past five years came from China, totaling $5.28 billion, which accounts for 63% of China’s total global arms suppliers in South Asia exports. According to Chinese media, Pakistan has also announced plans to purchase the FC-31 stealth fighter jet from China. On the other hand, Dassault Aviation Rafale jets, manufactured by the French company Dassault Aviation, are listed on the European stock exchange and recorded a drop of approximately 24 euros in their share value between May 6 and May 12. This decline has been linked to the Pakistani claim that Rafale jets were shot down during India’s Operation Sandhoor, allegedly with the help of J-10C jets. Established in 1929, Dassault Aviation not only manufactures the Rafale but also designs other military aircraft, business jets, and spacecraft. The company has produced around 10,000 aircraft, which are in service in 90 countries worldwide — including India and Pakistan. The number of its active military aircraft is about 1,000, while there are 2,150 Falcon jets in operation — a key part of the France-India military partnership.

According to the Pakistan Air Force, JF-17, F-16, and J-10 aircraft from Pakistan participated in the airstrikes against India.


India has long relied on French defense equipment. In the 1980s, it acquired Mirage 2000 jets and purchased submarines in 2005. In 2019, India received 36 Rafale jets from Dassault Aviation, and in April 2025, it signed the Indian Rafale deal 2025 to purchase an additional 26 Rafales worth $7.4 billion — a major event in India's arms imports. Similarly, a slight increase was also recorded in the shares of Israeli Aerospace Industries Harop drones, reflecting a surge in Israeli defense exports to India. In this context, Israeli news outlet Ynet News reported on May 9 that the defense industry is closely monitoring the escalating situation between India and Pakistan. A day earlier, Pakistani officials had accused India of violating its airspace using Israeli Aerospace Industries Harop drones, while New Delhi accused Pakistan of doing the same using Turkish-made drones, showcasing the complexity of the India-Israel arms agreement. According to the report, citing Israeli defense sources, India purchased nearly $1.5 billion worth of weapons from Israel last year, making it a key market for Israeli defense firms and a prime player in global arms suppliers in South Asia. It also mentioned that Israeli company Elbit Systems supplies Hermes drones to the Indian military and has a drone manufacturing plant in Hyderabad. Through this partnership, India supported Israel with drone components and supplies following Hamas’s October 7 attack. However, following global developments — including a ceasefire between India and Pakistan — a decline in the value of shares of Israeli defense companies was recorded. According to a Reuters report, India is the largest buyer of Israeli military equipment. Over the past decade, India has purchased $2.9 billion worth of military hardware from Israel, including radar systems, surveillance tools, drones, and missiles. SIPRI’s research highlights that India is the world’s largest arms importer, having bought $37 billion worth of military equipment between 2021 and 2022. During the same decade, India also imported $21.8 billion worth of defense equipment from Russia, $5.2 billion from France, and $4.5 billion from the United States — further illustrating the scale of India's arms imports and the competition among global arms suppliers in South Asia.



India is one of the largest buyers of Israeli defense equipment.


Why Did Chengdu and Dassault Experience Fluctuations?


Experts from the stock exchange industry suggest that the fluctuations in the shares of Chengdu Aircraft Corporation and Dassault Aviation stock are driven by capital market dynamics, which play a crucial role in the buying and selling of shares of publicly listed companies globally. Samiullah Tariq, Head of Research and Development at Pak Kuwait Investment Company, said that during the Pakistan-India air conflict in 2025, there was a technological competition, and based on their performance, the stock prices of both companies experienced changes. He explained that Dassault Aviation's performance was below expectations, while J-10 fighter jet performance exceeded expectations, and this had a direct impact on the stock prices of Chengdu Aircraft Corporation. On the other hand, Sana Taufiq, Head of Research at Arif Habib Limited, believes that "perhaps investor confidence in Rafale and J-10 was affected, while on the other hand, investors may be showing interest in Chengdu Aircraft Corporation stock." owever, Sana Taufiq pointed out that after the initial rise in Chengdu's share value, there was a slight decline, which is known as a "technical correction." This refers to the phenomenon when, after an excessive purchase of a company’s shares in the stock exchange, some investors decide to sell and secure profits, a process referred to as "profit-taking in stock markets" and stock correction in the aviation industry.

Experts believe that governments around the world are increasing their defense budgets


Does the clash between two countries benefit defense companies?


According to Dr. David Co, co-founder of "The Smart Investor," a company that monitors stock market fluctuations in the defense sector, particularly global markets, news of cross-border conflict can indeed impact the shares of defense companies. However, he explains that "Even if a company benefits from such news and its stock value temporarily increases, this increase is not usually long-lasting. But that does not mean there will be a significant reduction in long-term defense equipment demand soon." He continues, "Globally, instability appears to be increasing. The demand for defense equipment could be long-lasting as governments are increasing their defense budgets in Asia and globally, leading to global defense spending increases." "These plans are not limited to a few days; they can last for many years," he adds, giving the example that tanks or aircraft cannot be built in just a few weeks. Dr. Co notes, "Today, the defense sector is much broader than just guns and missiles. The defense industry is also involved in modern methods of surveillance and information technology." However, he believes it is incorrect to say that the global market would not respond to news of wars, and the market responds to war news. When asked specifically about the recent performance of the Chinese company, Chengdu Aircraft Corporation, based in Singapore, he mentioned that the stock value of defense companies, particularly this company, which manufactures J-10C fighter jets, has been rising for quite some time. According to his analysis, this may be due to "the potential increase in China’s defense budget." In this context, David Roach from Quantum Strategy believes that the increase in the stock value of Chinese defense companies in the market could also highlight that if tensions between Pakistan and India rise, "China will provide more weapons to Pakistan to compensate for any losses." According to a report from the International Institute for Strategic Studies, the influence of geopolitical tensions on stock prices is evident, with global defense spending reaching $2.46 trillion in 2024 due to increasing security threats. Countries in Asia, the Middle East, North Africa, and Europe have raised their defense budgets, and this trend is expected to continue into 2025.



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