New Delhi: Shares of Asian defense and aerospace companies experienced an uptick, while many US and European defense firms saw a decline in their share values as tensions between India and Pakistan escalated. India launched 'Operation Sindoor' targeting what it described as "nine terrorist infrastructure" sites in Pakistan and Pakistan-administered Kashmir. This operation followed a deadly attack in Pahalgam, Indian-administered Kashmir, on April 22, which left 26 people dead. India attributed the attack to Pakistan, a claim that Pakistan has denied.
According to Anadolu Agency, Pakistan reported that six locations were hit during the Indian strikes, resulting in at least 31 casualties. Pakistan condemned the attack as an 'act of war' and threatened a 'befitting reply.' In a significant escalation, Pakistan claimed to have downed five Indian fighter aircraft, including French Rafales, using their Chinese-manufactured JF-17 and JF-10 jets. India has yet to issue a response to Pakistan's claims regarding the downing of its aircraft.
The ongoing conflict has had a noticeable impact on the stock market, particularly in the defense sector. Asian defense shares benefited from the turmoil, with South Korean companies Hanwha Aerospace and HLB Co witnessing gains of 8.8% and 2.4%, respectively, on Wednesday morning. Additionally, Japan's Mitsubishi Heavy saw its shares rise by 1.9%. Other notable increases included South Korean HD Hyundai Heavy Industries Co. at 1.7%, Singapore Technologies Engineering at 1.3%, and China's AVIC Xi'an Aircraft Industrial Corporation at 1%.
Conversely, the tensions negatively affected US and European defense firms. Despite some companies like Harris Technologies, Lockheed Martin, Boeing, and Northrop Grumman seeing their shares advance, others faced declines. US-based General Dynamics' shares decreased by 0.4%, RTX Corporation fell by 0.5%, and French firm Safran also dropped by 0.5%. German defense firm Rheinmetall AG saw a 0.7% decline, while European aviation giant Airbus experienced a more significant fall of 1.3%.
UK-based Rolls-Royce and BAE Systems' shares dropped by 2% and 2.3%, respectively. German company Lufthansa faced a substantial decline of 3.9%, and French firm Dassault Aviation saw its shares plummet by 5.2%, reflecting the broader impact of the geopolitical tensions on investor sentiment.