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Korean Defence Stocks Soar as Autos, Shipbuilders Sink Amid Global Tensions

South Korean defence stocks, led by Hanwha Aerospace, have seen significant market cap gains in the month following U.S.-Israeli air strikes on Iran. Conversely, major automakers Hyundai and Kia, along with shipbuilder HD Hyundai Heavy Industries, have suffered steep declines in market value as prolonged regional tensions disrupt supply chains. The benchmark KOSPI index pared heavy early losses to close only slightly lower on Friday amid mixed signals from the U.S. regarding the conflict. Trade volume remained moderate with market losers and winners nearly even.

Key Points: Korean Defence Stocks Rise, Autos Fall Post Iran Strikes

  • Defence stocks surge post Middle East conflict
  • Auto giants Hyundai & Kia market cap plunges over 24%
  • Shipbuilder HD Hyundai Heavy Industries value drops 17.3%
  • KOSPI recovers from steep early losses to close slightly down
2 min read

Defence stocks rise in S. Korea as autos, shipbuilders fall amid global tensions

South Korean defence stocks like Hanwha Aerospace surge while Hyundai and shipbuilders see market cap plunge amid Middle East tensions and supply chain woes.

"defence giant Hanwha Aerospace saw its market capitalisation increase 11.7 percent - Yonhap"

Seoul, March 29

The market capitalisation of defence stocks rose while that of auto and shipbuilding shares fell on the benchmark Korea Composite Stock Price Index about a month after U.S.-Israeli air strikes on Iran, bourse data showed on Sunday.

According to data by the Korea Exchange (KRX), Samsung Electronics Co. retained the top spot in market capitalization, with 1,063.8 trillion won (US$705 billion) as of Friday, followed by SK hynix Inc. with 657.1 trillion won, reports Yonhap news agency.

Top carmaker Hyundai Motor Co. remained in third place, but its market value declined 26.6 percent to 101.3 trillion won between Friday and Feb. 27, a day before the outbreak of the military conflict in the Middle East, as prolonged regional tensions disrupted the global supply chains and pushed up oil prices.

Its sister Kia slipped two notches to ninth place, with its market cap plunging 24.2 percent over the same period.

Major shipbuilder HD Hyundai Heavy Industries Co. saw its market value decline 17.3 percent, dropping to 11th place from ninth.

However, defence giant Hanwha Aerospace saw its market capitalisation increase 11.7 percent to 68.8 trillion won from 61.6 trillion won over the cited period, with its ranking climbing three notches to seventh.

LIG Nex1 Co.'s market value surged 44.4 percent, and Hanwha Systems Co. rose 9.2 percent.

Meanwhile, South Korean stocks closed a tad lower on Friday after paring most of their earlier losses amid the United States' mixed signals on its war against Iran and eased concerns over the chipmaking industry. The local currency lost ground against the greenback.

After opening 2.93 percent lower, the benchmark Korea Composite Stock Price Index (KOSPI) fell 21.59 points, or 0.4 percent, to end at 5,438.87, after dipping to as low as 5,220.10.

Trade volume was moderate at 889.8 million shares worth 23 trillion won (US$15.3 billion), with losers and winners almost even at 441 to 436.

- IANS

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Reader Comments

P
Priya S
Interesting to see the ripple effects. High oil prices and supply chain issues will hit our auto sector too. Hope our policymakers are watching this closely. The focus should be on energy security and alternative supply routes.
R
Rohit P
A 44.4% surge for a defence company! That's massive. It's a sad reality that conflict drives certain industries. Makes you wonder about the long-term economic cost of these tensions beyond just stock prices.
M
Michael C
From an investment perspective, this is a classic "flight to safety" or rather, "flight to sectors perceived as safe" during geopolitical risk. However, the article doesn't deeply analyze if this defence rally is sustainable or just a short-term spike.
S
Shreya B
The common man suffers with high oil prices, while defence companies profit. There's something fundamentally wrong with this picture. We need global efforts for peace, not just market analysis of war.
K
Karthik V
Samsung still on top shows the enduring strength of tech. But the hit to Hyundai is worrying. Many Indian families own Hyundai/Kia cars. Hope the situation stabilizes soon for the sake of global trade and jobs.

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