Stocks of defense companies rallied on Monday, after the news that the Carl Vinson U.S. Navy Strike Group is moving toward the Korean Peninsula in a show of force against North Korea, which continues to pursue a nuclear program.
On the main KOSPI market, Hanwha Techwin, a defense goods unit of Hanwha, ended at 48,800 won, up 2.63 percent from the previous session. LIG Nex1, another defense product producer, also inched up by 0.36 percent to end at 83,100 won.
Other defense-related firms, including Huneed Technologies and Korea Aerospace Industries, also showed a noticeable uptrend throughout the session.
On the tech-heavy KOSDAQ market, electronic warfare system developer Victek surged 29.88 percent to end at 5,260 won. Speco, a military vessel parts manufacturer, also gained 25.84 percent to finish at 6,720 won. Other defense-related firms, such as Firstec and EM Korea, also shot up by more than 15 percent.
The heightened tensions pumped up the prices of defense companies, but weighed on the bourse as a whole.
The benchmark KOSPI ended at 2,133.32 points, down 18.42 points or 0.86 percent from a session earlier. The KOSDAQ also declined to 619.41 points, down 13.91 points.
Except for the electronics and electric industries, most industries, including bio, pharmaceutical, food, machinery and finance, headed down.
Large-cap companies like Samsung Electronics and Hyundai Motor each gained 0.82 percent and 1.04 percent. SK hynix shed 1.61 percent and Korea Electric Power Corp. declined 1.11 percent.
“The U.S. missile strikes against Syria and the strike group’s move to the Korean Peninsula are raising external uncertainties,” a Hana Financial Investment analyst said. “If those geopolitical risks are not realized, the impact on the market will be limited. However, it remains to be seen how investors will react down the road.”