Cheonggung missile launcher on display during the Seoul International Aerospace and Defense Exhibition (ADEX 2025) held at Seoul Air Force Base in Seongnam, Gyeonggi Province, South Korea, on October 17, 2025.
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South Korean defense-related stocks rose significantly on Tuesday, when the South Korean market returned from the holiday, as interest in defense stocks increased worldwide due to the Iran war.
Shares of major Hanwha Aerospace, South Korea’s largest defense manufacturer, soared nearly 25% before cutting its gains to about 13%, while Korea Aerospace Industries, which rose more than 12%, pared its gains to 2.4%.
Shares in air defense systems maker LIG Nex1 soared 25%, while shares in electronic warfare systems maker Vitek and anti-aircraft missile parts maker Fastech rose more than 20% and 15%, respectively.
Ammunition maker Punsan rose 8.2%, while K2 main battle tank maker Hyundai Rotem rose more than 5%.
The sector’s gains were in contrast to the broader Kospi, which led the losses in Asian markets by 4.36%.
Since the conflict between Ukraine and Russia, South Korea’s prominence in the global defense sector has increased, and the country aims to become the world’s fourth largest defense industry by 2030.
Orders from European countries such as Poland and Romania are driving significant gains in the sector as countries on the continent increase their defense spending.
Global defense stocks soared on Monday as investors reacted to a dramatic military escalation in the Middle East.
In Europe, Germany’s Hensoldt and Britain’s BAE Systems were at the top of the Stoxx 600 index, rising nearly 5% and 6%, respectively.
In the U.S., Lockheed Martin and Northrop Grumman rose more than 3% and about 6%, respectively.
—CNBC’s Elsa Olhen contributed to this report.
