Conflicting Stock Prices Following News of North Korea's Military Action Plan Suspension
Stock Market on a Rollercoaster Amid Heightened Inter-Korean Tensions
[Asia Economy Reporter Oh Ju-yeon] Following North Korea's provocation of blowing up the inter-Korean liaison office on the 16th, the positions of defense stocks and pro-North Korea stocks, which had fluctuated between heaven and hell, have now reversed completely. On the 24th, as news spread that North Korean Chairman Kim Jong-un had postponed the military action plan against the South, defense stocks that had surged sharply plummeted by nearly 20%, while pro-North Korea stocks soared by double digits.
According to the Korea Exchange on that day, Big Tech, a representative defense stock, traded at 9,080 won, down 20.79% from the previous trading day. During the session, Big Tech plunged 24.89%, falling to the 8,600 won range. This was due to a slight easing of the tense inter-Korean situation.
Following North Korea's destruction of the inter-Korean liaison office, deployment of troops to Mount Kumgang and the Kaesong Industrial Complex, advancement into the Demilitarized Zone outposts, military exercises in border areas, and support for leaflet distribution against the South, inter-Korean tensions reached a peak.
Consequently, defense stocks continued their soaring trend.
Big Tech's stock price surged 86.7% from 6,240 won on the 15th to 11,650 won on the 19th. Notably, it rose as high as 14,850 won during the session, marking a 138.0% increase. During the same period, Specco also surged 116.4%, from 5,960 won to 12,900 won during the session on the 19th, and Hanwha Aerospace's stock price rose 18.9%, from 26,150 won on the 15th to 31,100 won during the session on the 17th.
However, when North Korea announced at the preliminary meeting of the 7th Central Military Commission of the Workers' Party on the 23rd that it would postpone the military action plan against the South, the tense situation temporarily eased. As a result, these defense stocks collapsed, while pro-North Korea stocks, which had all sharply fallen the previous week, rebounded.
Along with Big Tech, Specco traded at 6,730 won as of 9:52 a.m. that day, down 24.29% from the previous trading day, and Hanwha Aerospace also fell 4.21%.
On the other hand, Ananti, a representative pro-North Korea stock, rose 13.95% to 10,050 won. Ananti had shown a steady downward trend in mid-month due to the strained inter-Korean relations. Its stock price, which was 10,950 won on the 5th, dropped 23.3% to 8,400 won on the 18th, but has since turned to a recovery mode amid easing inter-Korean tensions.
Along with Ananti, other pro-North Korea stocks also rose slightly. Hyundai Elevator rose 2.87% from the previous trading day, and Shinwon, related to the Kaesong Industrial Complex, rose 10.10%. Following these, Busan Industrial (12.18%) and Daeho AL (10.39%) also rose by double digits.
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