South Korean defense stocks surged massively on Tuesday, following the resumption of markets from a public holiday, as the Iran war fuels global interest in defense names.
Hanwha Aerospace, the largest South Korean defence manufacturer, saw its stocks rise by almost 25 percent before scaling back the gains to approximately 13 percent. Meanwhile, Korea Aerospace Industries soared over 12 percent, reducing the gains to 2.4 percent.
Stocks in air defense systems manufacturer LIG Nex1 increased 25 percent, while electronic warfare systems manufacturer Victek and anti-aircraft missile components maker Firstec witnessed an upsurge in shares of more than 20 percent and 15 percent, respectively.
Ammunition manufacturer Poongsan rose 8.2 percent, and Hyundai Rotem, the producer of the K2 main battle tank, increased more than 5 percent.
The industry gains stood in stark contrast to the broader Kospi, which dropped 4.36 percent to spearhead the market losses in the Asian markets.
South Korea’s dominance in the global defense space has been rising since the Ukraine-Russia conflict, with the country aiming to be the world’s fourth biggest defense industry by 2030.
The demand of European countries, including Poland and Romania, has driven huge positive returns in the industry, as the nations in the continent are spending more on defense.
However, the global defense stocks rose on Monday as investors responded to a dramatic military escalation in the Middle East. Germany’s Hensoldt and Britain’s BAE Systems in Europe were the top performers in the Stoxx 600, nearest close to 5 percent and around 6 percent.
Thus, the Stateside, U.S. companies Lockheed Martin and Northrop Grumman surged more than 3 percent and almost 6 percent, respectively.
