Japan and South Korea defense stocks jump after Hamas attack, aviation stocks slide
- Japanese and South Korean defense stocks have surged after Palestinian militant group Hamas attacked Israel.
- The two markets are having their first day of trade after the attacks, having had a public holiday on Monday.
Japanese and South Korean defense stocks surged on Tuesday as both stock markets returned to their first day of trading following the weekend attack of Israel by Palestinian militants Hamas.
Hamas launched a surprise and unprecedented attack on Israel on Saturday, driving Israel to declare war and launch a barrage of retaliatory strikes on the Gaza Strip, which is ruled by the militant group.
In South Korea, defense heavyweights Hanhwa Aerospace — which builds artillery and air defense systems — gained 2.23%, while Korea Aerospace Industries rose 4.07%. KAI produces fighter jets and aviation platforms for the South Korean military.
Smaller South Korean defense players saw bigger gains. Shares of electronic warfare systems maker Victek spiked almost 30%. Firstec, which manufactures fire control systems and guided munitions jumped 20%.
In Japan, the largest gainer was Kawasaki Heavy Industries, which climbed almost 6.5%. The company manufactures aircraft and naval vessels for Japan's Self Defense Forces.
Mitsubishi Heavy Industries, which also produces aircraft and naval vessels as well as missiles for the JSDF, rose 5.86%.
Other Japanese defense stocks also rose, with rocket engine builder IHI advancing 4.01% and pyrotechnics manufacturer Hosoya Pyro-Engineering up 5.27%.
On the other hand, shares of airlines in both countries tumbled after carriers around the world scrapped flights to Israel. Japanese carriers ANA Holdings and Japan Airlines slid 0.85% and 1.93% respectively, and in South Korea, shares of Korean Air fell 2.61%.