Indian share market is currently in recovery mode. After the strong momentum of September 2024, there was a bounce in December, but still the portfolios of most investors are in loss. Whereas China and Hong Kong markets are on record rally. Hang Seng Index has shown a rise of about 29% in the last one year, due to which foreign investors are withdrawing money from India and shifting towards China.
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China auto market: The condition of China’s auto sector has been defeated, since China’s largest electric vehicle company BYD decided to drastically cut the price. The company has cut the prices of its 22 models by 34 percent. It also includes electric car seagel, which is now priced at $ 7,700. This promotion of the company is going to run till June, but this marketing campaign has become a challenge for other companies as now other auto companies may also have to resort to discounts to move forward in this race, which can cause a huge decline in the auto sector.

Company focus on volume not margin

On Monday, BYD shares declined by more than 8 percent. The shares of other EV companies also recorded a decline. Market experts believe that the target of BYD is to sell 5.5 lakh vehicles in 2025, which is 30 percent more than the previous year. American analyst firm Morningstar Vincent Sun says that the company is worried about the volume, not a margin.

Now this price war has gradually spread throughout the sector. Other companies like wet, leapmotor are also reducing the prices of their models. Experts believe that these price war may be for a short time, but over time it can weaken the brand value and be out of the race with weak balance sheet as not every company can suffer losses. Hatong’s Oscar Wang warned that if there was no attempt to control the situation, there is a possibility of heavy losses in the cost in the second half of 2025.

Companies are going into losses

Meanwhile, 9.5 percent of wet auto shares in Hong Kong stock market declined by 3 % and 8.5 percent respectively in shares of Neo and Lipmotor. Many foreign companies are looking for other global markets outside here, given the growing competition and deficit in China.

There is also India in this list, whose auto sector is moving fast. In such a situation, companies are settling their manufacturing base or export base here. At the same time, the situation in China is that some companies are selling cars at a lower price than the cost. There are also many startup companies in China’s growing electric vehicle segment, which will face huge losses due to this price war.

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The impact of the speech given by Prime Minister Narendra Modi’s ‘Operation Sindoor’ was not limited to India and Pakistan only, China’s aviation industry has also been shocked. Especially the company that supplies a fighter aircraft to Pakistan, its shares fell badly.

Avic Chengdu Aircraft shares declined by 9 percent

Avic Chengdu Aircraft, which is a Chinese company that makes J-10 fighter jet, saw a huge decline on Tuesday 13 May. The stock broke by 9.31 per cent to 86.93 yuan. This happened when PM Modi directly warned Pakistan that if terrorism continues, it would be erased.

Indian defense stocks boom

Pakistan had claimed that it had targeted India’s Adampur airbase. But both PM Modi and Railway Minister Ashwini Vaishnav called it just a “false propaganda”. After India’s successful ‘Operation Sindoor’, shares of Indian defense companies climbed, while companies standing in support of Pakistan were exposed.

Pakistan’s “Dragon Deal” effect

The J-10 jet, called “Ferris Dragon”, is a single engine lightweight fighter jet, which has been prepared by China’s Chengdu aircraft industry. In 1998, the first flight joined the Chinese Army in 2003. Its advanced version J-10C Pakistan was exported in 2022.

Dassault Aviation (Rafael) shares jumped

On the other hand, the shares of France’s Dassault Aviation (Rafael Jet’s producer company) rose by 3 per cent. According to reports, India used Rafale fighter jets, SCALP cruise missile and Hammer bomb in ‘Operation Sindoor’. The special thing is that India carried out this operation without violating the Pakistani air border.

China shares were called a day ago, now collapsed

A day earlier, Avic Chengdu Aircraft shares rose by 20 per cent and reached 95.86 yuan, but investors pulled out of shares after Modi’s speech and Pakistan’s strategic failure. Apart from this, the shares of China State Shipbuilding Corporation broke up to 4 percent and Zhuzhou Hongda Electronics Corp Ltd’s shares were broken up to 6 percent.

India also showed power in the market with diplomacy

The success of ‘Operation Sindoor’ has given lessons not only to Pakistan, but also to its weapons suppliers and supporters. India’s surgical strikes and political messages have also affected the global market, where confidence in India’s defense stocks has increased, while China-Pak supporters have suffered strong losses.

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After the Pahalgam attack, there is tension between India and Pakistan. On the other hand, Trump’s trade war has also created panic all over the world. However, despite this, most of the big stock markets of the world were seen in the last one week. Index like India’s Nifty 50, France’s CAC 40, Germany’s DAX, America’s Dow Jones, NASDAQ and Japan’s Nikkei 225 saw a significant increase.

But in this entire global rapid period, China’s Shanghai Composite Index was the only big index that closed down with a decline. The big thing is that this decline is not only of data, but it shows that there are some serious underlying problems in China’s economy and market, which are affecting the trust of investors.

Strength in markets around the world including India

Talking about the figures, India’s Nifty 50 has risen to +1.28 per cent last week, America’s Nasdaq +3.42 per cent, Dow Jones +3.00 per cent, Japan’s Nikkei 225 +3.15 per cent, German’s dax +3.80 per cent and France’s CAC 40 +3.11 per cent. Apart from this, Hong Kong’s Hang Seng +2.38 percent, South Korea’s KOSPI +0.53 percent, and S&P of America also went up 500 +2.92 percent. It is clear from these data that global economic perception has been positive and the trend of investors has increased towards taking risks. There has been good purchase in technical shares, banking and consumer sectors around the world.

China’s stock market alone

Apart from this, China’s Shanghai Composite Index fell -0.49 per cent, which suggests that investors suffered losses in China’s stock market. The question arises that when all the rest of the markets are showing fast, what happened in China that the market has come down?

Challenges of China’s economy

According to the expert, the first major reason for this is the slowdown in the Chinese economy. There is a huge recession in the property sector there. Large real estate developers are burdened with loans and new projects have come to a standstill. Along with this, common people are also avoiding spending, due to which domestic demand is weakening.

The second major problem is geopolitical stress. China’s relations with the US and other Western countries remain constant stressful. Due to this, investors are afraid that more ban or business obstacles do not come in future.

Questions on the policies of China government

Some policies adopted by the Chinese government have also affected the notion of the market. From curbing technology companies to strictness on the private sector, there are many steps that make investors uncomfortable. Due to this, foreign investors are investing money in other emerging markets instead of China.

Difference between global and local

One thing is clear from this whole situation that global economic activities do not have the same impact on every country. While most markets in America, India, Europe and Asian countries have shown good recovery, China is still under pressure. This will affect not only the returns of investors but also on the global economic situation of China. If there is no improvement soon, it can decline and deepening.

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