South Korea defense stocks soar with heavyweight Hanwha Aerospace surging 25% as traders react to Iran war

Heavyweight Hanwha Aerospace, which is South Korea’s largest defense manufacturer, saw shares surge nearly 25%, before paring gains to about 13%, while Korea Aerospace Industries gained more than 12%, but cut those to 2.4%.

Shares in air defense systems maker LIG Nex1 soared 25%, while electronic warfare systems manufacturer Victek and anti-aircraft missile components’ maker Firstec saw shares rise more than 20% and 15%, respectively.

Ammunition manufacturer Poongsan was up 8.2%, while Hyundai Rotem, maker of the K2 main battle tank, was up over 5%.

The sector’s gains were in sharp contrast to the wider Kospi, which fell 4.36% to lead losses in Asian markets.

Orders from European nations such as Poland and Romania have powered massive gains in the sector as countries on the continent increase their defense spending.

Global defense stocks soared Monday as investors reacted to a dramatic military escalation in the Middle East.

In Europe, Germany’s Hensoldt and Britain’s BAE Systems were among the top performers in the Stoxx 600, up close to 5% and around 6%, respectively.

Stateside, U.S. firms Lockheed Martin and Northrop Grumman rose more than 3% and about 6%, respectively. 

— CNBC’s Elsa Olhen contributed to this report.