Middle East Oil Shock Causes Aerospace to Plunge Nearly 17% in One Month
Safran and Airbus Lead the Sector in Downward Spiral
The two major players in the sector are at the heart of the correction. Safran has dropped 18.89% over a month and decreased by another 3.96% this Friday, with an RSI falling to 21, deep in oversold territory. Airbus, with a market capitalization exceeding 127 billion euros, shows an RSI just slightly higher at 20, and declined by 1.85% during the session.
In the private and military aircraft sector, Dassault Aviation is holding up a bit better (–6.86% over the period) but also fell by 4.29% today.
Subcontractors are not spared either: Figeac Aéro lost 2.25% on the day. Only LISI, specializing in design and assembly, managed to end in positive territory (+1.12%).
The macro context sheds light on this downturn: the surge in Brent crude beyond $107—up 50% since the end of February—linked to the military escalation in the Middle East, has sharply increased the cost of jet fuel. The temporary closure of airports in the Gulf and the collapse of international traveler confidence in the region add a layer of uncertainty to order books. The VIX, at 25.09, up more than 12% over two days, confirms a high-tension environment in the markets.
Broad Sell-Off: Extreme Technical Signal, but Underlying Trend Weakens
The sector's technical chart presents a mixed message. The capitalization-weighted RSI has dropped to 26.7, entering a marked oversold zone, a level that has historically often preceded technical rebounds. However, the underlying signals remain negative: the sector's weighted average price is significantly below its 50-day and 200-day moving averages, indicating a bearish trend both in the medium and long term.
The sector's MACD remains below its signal line, confirming a loss of momentum. In other words, while conditions for a short-term technical rebound might be in place, there is currently no indication of a sustainable trend reversal. The continuation of the movement will largely depend on developments in the Middle East conflict and its impact on energy prices. Investors will closely watch the ability of Safran and Airbus to find a floor, as these two stocks account for the majority of the sector's capitalization and effectively dictate the trajectory of the entire group.
This content has been automatically translated using artificial intelligence. While we strive for accuracy, some nuances may differ from the original French version.
