Escalation in India-Pakistan conflict had a clear winner — Chinese defence stocks.

Shares of Chinese defence manufacturing companies rallied on Wednesday as the border tensions boosted the outlook for Chinese exporters.

Pakistan, which imported a bulk of its defence equipment including J-10C fighter jets, claimed to have shot down five Indian planes, including a French Rafale jet. This led to speculation that Chinese defence platforms may have been deployed in the conflict, given Pakistan’s recent heavy reliance on such arms imports, Bloomberg reported.

An index of Chinese defence companies in mainland China jumped 1.6 per cent to a two-week high. The J-10C fighter jet maker Avic Chengdu Aircraft Co. was among the biggest gainers, with its stock rising the most since October 14.

Pakistan has been buying the bulk of its arms from China. Imports from the country made up 82 per cent of Pakistan’s stock from 2019-2023, compared with 51 per cent from 2009-2012.