Stock market: aviation soars by nearly 8% in the wake of geopolitical relief

Safran and Air France-KLM Leading the Way in a General Rebound

Ten out of eleven aviation sector stocks are in the green, none are in decline. Air France-KLM is leading the charge with a jump of 13.51%, benefiting directly from the relaxation on kerosene prices – Brent has fallen to $93, compared to much higher levels in recent weeks. SAFRAN, a heavyweight in the sector with over 131 billion euros in market capitalization, is up 11.24%, driving the entire sector index. Figeac Aero (+7.88%), AIRBUS (+7.85%), and LISI (+7.04%) complete a uniformly green picture.

The magnitude of the movement exceeds that of the broader industry (+6.94%) and defense (+7.20%) sectors, which are also experiencing strong increases. The CAC 40 is up 4.71%, the SBF 120 is up 4.61%, confirming a marked outperformance in the aeronautical sector, the most sensitive to a combination of lower energy costs and improved visibility on international air routes.

A Strong Rebound, But Still Technical at this Stage

For investors, the question is whether this spectacular rebound can be sustained. Several technical signals suggest a nuanced view. The sectoral RSI, weighted by market capitalizations, stands at 43 – neutral territory that reflects the extent of the previous correction rather than excessive optimism. The sector’s weighted average price has returned above its 50-day moving average and remains above the 200-day moving average, indicating a medium to long-term momentum that has turned bullish again.

The sectoral MACD has also crossed above its signal line, confirming a nascent positive trend. However, several iconic companies like Airbus and Air France-KLM are still below their 50 and 200-day averages, indicating that today’s session is more of a strong technical rebound than a completed trend reversal. The next steps will largely depend on the actual confirmation of the Strait of Hormuz reopening and the progress of talks announced in Pakistan since Friday. For now, the sector is gaining momentum, but pre-crisis levels have not yet been regained.