Shares of Dassault Aviation, the maker of Rafale jets that India reportedly used against Pakistan during 'Operation Sindoor', extended their rally for a second straight session on Wednesday, May 14, rising over 1.47% to hit an intraday high of EUR 304.40 on the Paris Stock Exchange, edging closer to its record high of EUR 332.20.
After a sharp 7% drop on Monday, Dassault Aviation rebounded by more than 3% on Tuesday. Market experts pointed out the formation of a bullish hammer pattern on the monthly chart, suggesting more upside in the near term, Live Mint reported.
The recent surge is being linked to geopolitical developments. Following India’s Operation Sindoor on May 7, in which Rafale jets reportedly struck terror infrastructure deep inside Pakistan using SCALP and HAMMER munitions, investor sentiment around Dassault Aviation has improved.
Also Read | Did India lose Rafale fighter jet in Operation Sindoor action? Indian military says this
The stock’s upward momentum is also backed by solid fundamentals. Dassault Aviation reported €6.24 billion in annual revenue and a net profit of €924 million, while the broader French Aerospace & Defence sector grew 17.7% over the past year.
{{/usCountry}}The stock’s upward momentum is also backed by solid fundamentals. Dassault Aviation reported €6.24 billion in annual revenue and a net profit of €924 million, while the broader French Aerospace & Defence sector grew 17.7% over the past year.
{{/usCountry}}Dassault Aviation stock rebounded after Prime Minister Narendra Modi, with an S-400 missile defence system in the backdrop, sent a firm message Tuesday from Adampur Air Base to Pakistan.
Also Read | J-10 jets maker Avic Chengdu Aircraft's shares plunge after PM Modi's ‘Operation Sindoor’ success speech
In his first speech to the armed forces since Operation Sindoor, Modi lauded the military for humbling Pakistan in the four-day engagement that resulted in the destruction of nine terror sites, killing of over 100 terrorists and damage to its eight military installations.
But the significance of the speech was immense. It was delivered from the Adampur base, merely 100 km from the Pakistan border, which Pakistan claimed to have destroyed along with the S-400 missile defence system. India had rubbished the claims and TV cameras following Modi corroborated that.
Reiterating that Operation Sindoor is India’s new normal, he praised the soldiers, saying what they have achieved is unprecedented, unimaginable and amazing, making every Indian proud and indebted.
"Aatank ke viruddh Bharat ki Lakshman Rekha ekdam spasht hai. Ab phir koi terror attack hua to Bharat jawab dega, pakka jawab dega. (India's Lakshman Rekha against terrorism is now crystal clear. India will respond and definitely respond if hit by a terror attack),” he said, in an over 27-minute speech which echoed the message of his address to the nation on Monday night.
Also Read | Rafale maker Dassault shares plummet; China's Avic Chengdu, manufacturer of J-10, sees stock soar
Some setbacks for Dassault Aviation
Dassault Aviation shares saw volatility in the European stock market, plunging as much as 7% intraday on Monday to touch €292, with prices fluctuating between €291 and €295 throughout the day.
Meanwhile, shares of AVIC Chengdu Aircraft Corporation, the Chinese aerospace company behind the J-10 fighter jets, inducted by Pakistan, surged by 20 per cent on May 12. This marked a significant rise in investor confidence for Chengdu Aircraft Corporation, with its stock reaching Chinese Yuan 95.86, a 60% increase from the previous week.
Despite the dip, Dassault Aviation's stock’s broader performance remains strong, backed by healthy fundamentals. According to Live Mint, the company reported annual revenue of EUR 6.24 billion and a net profit of EUR 924 million, aligning with the 17.7% growth in the French Aerospace & Defence sector over the past year.
On May 8, the stock rebounded by 1.75%, closing at EUR 325.8 on the Euronext Paris exchange, lifting its year-to-date gain to 66.7% from its December 31 close of EUR 195.90.
However, in the last five trading sessions, Dassault Aviation’s stock had still recorded an overall decline of over 10%, reflecting ongoing market fluctuations.