New Delhi, May 14 -- Chinese defence stocks witnessed a sharp decline on Wednesday, with several names falling as much as 4%, following the ceasefire agreement between India and Pakistan that eased concerns over a potential escalation in the conflict. The Hang Seng China A Aerospace & Defence Index dropped for the second consecutive session, losing 1.3%.

Key constituents of the index, including China Aerospace Times Electronics Co. Ltd. (Long March Launch Vehicle Technology Co. Ltd), Bright Laser Technologies, North Industries Group Red Arrow Co., Xi'an Triangle Defense, China Spacesat, Beijing Bei, and AVIC Aircraft, recorded losses ranging between 1% and 4%.

Only two of the 29 stocks in the index were trading in positive territory, wi...