Dassault Aviation stock surges after PM Modi's 'Lakshman Rekha' warning to Pakistan

The shares of Dassault Aviation, the French company that makes Rafale fighter jets, jumped by 1.47% to reach €304.40 on May 14, 2025. This happened after India’s strong military action called “Operation Sindoor,” during which Rafale jets were reportedly used against terror camps in Pakistan. The rise comes just a day after Prime Minister Narendra Modi’s powerful speech from Adampur Air Base, where he warned Pakistan that India would respond firmly to any future terror attacks.

PM Modi’s speech was delivered with the backdrop of the S-400 missile defence system. This was important because Pakistan had earlier claimed to have destroyed the Adampur base and the S-400 system during the operation. But Modi's speech, delivered on-site and broadcast live, strongly denied those claims. He praised the military and declared that India’s stance against terrorism was now crystal clear. He said, "If any terror attack happens again, India will definitely give a strong response.”

This message boosted investor confidence in Dassault Aviation. The use of Rafale jets in the operation made headlines and reminded the world of India’s defence capability. The market responded positively, with Dassault’s stock rallying on Wednesday after a 3% gain on Tuesday. Experts say the stock formed a bullish hammer pattern, indicating more gains could follow. Dassault’s current stock value is close to its all-time high of €332.20.

Company performance and earlier setbacks

Even though Dassault Aviation’s stock rose recently, the company faced a 7% drop on Monday, May 12. The stock touched €292 during that day, with high volatility. Still, the company remains strong financially. It reported €6.24 billion in annual revenue and a net profit of €924 million. The overall French Aerospace & Defence sector also showed strong growth of 17.7% over the past year.

On May 8, Dassault Aviation stock had bounced back by 1.75%, closing at €325.80. This marked a year-to-date gain of 66.7%, up from €195.90 at the end of December. Despite a 10% fall over the past five trading sessions, the company’s fundamentals remain solid, giving investors confidence in its long-term performance.

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Meanwhile, Chinese firm AVIC Chengdu Aircraft Corporation, which makes the J-10 fighter jets used by Pakistan, saw its stock price jump by 20% on May 12. Its shares reached CNY 95.86, marking a 60% rise compared to the previous week. This rise is seen as a response to recent developments, but Dassault Aviation’s consistent financial health still places it in a strong position in the defence market.

In summary, India’s military action and PM Modi’s speech have directly impacted global defence stocks. Dassault Aviation, as the Rafale jet maker, is seeing increased investor trust, proving how geopolitical actions can quickly shift stock trends.