Avic Chengdu Shares Plunge 9.4% as PM Modi's Warning to Pakistan Bites

In a sudden turn of events, shares of Chinese defense company Avic Chengdu Aircraft have plummeted by an whopping 9.4% over the past two days following a strong-worded message from Indian Prime Minister Narendra Modi about the successful completion of Operation Sindoor.

The shares had been on a remarkable run, surging over 60% since the launch of Operation Sindoor on May 6, in response to Pakistan's alleged use of Chinese-made aircraft by its air force. However, with PM Modi's warning that India will not succumb to nuclear blackmail and will instead take decisive action against terror-sponsoring countries, the markets have suddenly turned against Avic Chengdu.

As of 9:30 am IST on May 14, the shares were trading at 90.65 yuan, a far cry from their Monday high of 100.09 yuan. Traders are now reeling from the sudden sell-off, which has made India's defense stocks rally instead.

In a bold move to deter Pakistan from employing terror tactics against India, PM Modi had warned that terror and trade cannot go hand-in-hand. He also hailed India's air defense system for destroying Pakistan's drones and missiles, saying it was a demonstration of the country's strong resolve to protect its sovereignty.

Industry experts warn that Avic Chengdu shares are now in an overbought zone on the weekly chart and may face stiff resistance in the 90-95 range. Ganesh Dongre, Senior Manager at Anand Rathi, advised traders to book profits at these levels and avoid fresh entries.

However, Anshul Jain from Lakshmishree Investment is taking a contrarian view. "Following the sharp rally, profit booking has set in," he said. "A retest of the breakout zone around 73 Yuan per share appears likely." This pullback could offer a buying opportunity for traders who are willing to take calculated risks.

With PM Modi's threat hanging over Pakistan like a sword of Damocles, traders will be watching Avic Chengdu shares closely for any signs of stability or renewed demand.