AVIC Chengdu Aircraft share price: J-10 fighter jet maker's stock crashes 8%, falls in 3 out of last 4 sessions

AVIC Chengdu Aircraft share price: Chinese defence stock — AVIC Chengdu — crashed nearly 8% in trade on Tuesday, May 20, as the rebound seen on Monday proved to be short-lived. The stock has now fallen in three of the last four trading sessions.

The stock of AVIC Chengdu, J-10 fighter jet maker, has traded on a volatile note since an address by Prime Minister Narendra Modi against India's changing stance towards tolerance of terrorism.

AVIC Chengdu share price trend

AVIC Chengdu Aircraft share price hit the day's low of 80.23 yuan on Tuesday, down 7.99% from its previous closing price of 87.2 yuan. In intraday deals, it hit a high of 86.3 yuan, which was still lower than the last closing price. In the last four trading session, the Chinese defence stock has fallen nearly 12%.

Meanwhile, in May so far, the J-10 fighter jet maker's stock has rallied a whopping 50% amid the escalation in the India-Pakistan conflict that led to four days of clashes between the two sides. Pakistan hailed the use of its Chinese J-10Cs to combat India's fighter jets, thus prompting a rally in the Chinese stock.

These gains come following four months of back-to-back losses, thus making May the first month of this year wherein AVIC Chengdu stock has gained.

However, a strong-worded address by Prime Minister Modi has acted as a dampener, derailing the high-flying AVIC Chengdu Aircraft stock. Modi said in an address to the nation that terror and trade, terror and talks, cannot go together.

PM Modi also warned Pakistan that India will not succumb to nuclear blackmail, adding that Operation Sindoor is India's new policy against terrorism and our unwavering pledge for justice. "It is the new normal. We have only kept in abeyance our operations against Pakistan, and the future will depend on their behaviour," Modi said in his address.

Operation Sindoor was India's response to a terror attack on Indian civilians in Pahalgam, Kashmir, on April 22, which resulted in the death of 26 people. India carried out precision strikes on terror infrastructure early on May 7, following which Pakistan attempted to attack Indian military bases on May 8, 9 and 10.

Meanwhile, India's defence stocks have been on a roll, rallying for seven straight sessions amid expectations of higher government spending in the segment and strong earnings growth.

AVIC Chengdu shares: Technical outlook

Anshul Jain, Head of Research at Lakshmishree Investments, said Chengdu is trading in a defined range of 96–85 and is likely to consolidate within this band for the next 5 to 8 weeks.

“Volumes are neither distributive nor indicative of strong accumulation, suggesting a lack of institutional activity. The current price behaviour reflects a phase of indecision. Until there’s a breakout or breakdown with significant volume confirmation, the stock is expected to continue its sideways movement within the stated range,” Jain added.

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