Defense stocks across Asia rose after Trump said NATO countries should shoot down Russian planes that violate their airspace.
Defense stocks across Asia surged after Trump's statement that NATO countries should shoot down Russian aircraft violating their airspace, Bloomberg reports.
South Korean companies led the region's rally. Shares of the country's largest defense contractor, Hanwha Aerospace, which has been in talks with Western European countries to help expand their weapons production capacity, rose 5.9% to reach an all-time high.
Shares of Korea Aerospace Industries Ltd. and Hyundai Rotem Ltd. each rose at least 4%.
Shares of Japan's IHI Corp. gained more than 6% to become one of the top performers on the Topix index, while shares of Mitsubishi Heavy Industries Ltd. rose more than 3%.
Shares of Australia's DroneShield Ltd. rose more than 7%. Overall, the defense sector's popularity in stock markets has increased amid global geopolitical tensions and expectations of expanded military budgets.
The MSCI World Aerospace & Defense Index has risen 51% year-to-date, outpacing the nearly 17% gain in the broader global equity index.
"Trump's comments show that geopolitical risks are back in focus, leading to a rise in defense stocks," said Jeong In-yun, CEO of Fibonacci Asset Management Global Pte. Ltd. "With tensions showing no signs of abating, defense companies are expected to be well-ordered for the next few years."
Stocks in focus in Europe after the opening bell today will include German tank and missile maker Rheinmetall AG, Norway's Kongsberg Gruppen ASA, France's Dassault Aviation SA, Britain's BAE Systems plc, Italy's Leonardo SpA, and Sweden's Saab AB.