By Admin 
When tension increased in India and Pakistan and the situation was like war, China got the most benefit from it. As long as there was tension between the two countries, China’s stock market, especially the defense stocks, saw a big boom. But, now that both countries have announced a ceasefire, China’s defense stocks are once again seen to decline.
Boom was in Chinese shares due to fear of war
After the recent struggle between India and Pakistan, investors felt that China would supply more weapons to Pakistan. This hope helped to move the shares of Chinese defense companies up.
On May 8, shares of Avic Chengdu aircraft (which supplies J-10C fighter jet to Pakistan) climbed 16 per cent. At the same time, shares of Avic Aerospace (Military Plane and Helicopter) also increased by more than 6 percent. Even the shares of China State Shipbuilding Corporation (which gives naval ship to Pakistan) were also above.
Ceasefire and shares
On May 10, India-Pakistan announced a ceasefire. America also played an important role in this and since then the Chinese defense shares have been seen to fall drastically. Avic Chengdu aircraft shares fell by 7.4 percent. The shares of China State Shipbuild also fell more than 4 percent. Shares of Zhuzhou Hongda Electronics (Military Electronics) also came down 6.34 per cent.
How strong China-Pakistan military relationship?
Pakistan has been buying weapons from China for a long time. According to SIPRI data, between 2019-2023, Pakistan bought weapons of $ 5.28 billion from China. 81 percent of Pakistan’s total imports come from China. Even Pakistan receives JF-17 Thunder Jet, SH-15 artillery guns and naval ships from China.
CPEC connection?
China-Pakistan is investing $ 60 billion in Pakistan under the Economic Corridor (CPEC). This project also includes security of Chinese personnel and assets, for which Pakistan may need more weapons.
Defense companies got shock?
As long as there was tension between India and Pakistan, China’s defense exports were likely to increase. But now due to the ceasefire, this expectation has weakened and it has a direct impact on the Chinese stock market.
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