On the morning of August 8, domestic defense stocks, including Hyundai Rotem, LIG Nex1, and Poongsan, were all showing significant declines. This is believed to be due to reports that a US-Russia summit could take place as early as next week, where discussions may be held to end the war in Ukraine.
As of 10:20 a.m. on this day, Hyundai Rotem's share price was trading at 180,800 won per share, down 6.27% from the previous session. Poongsan was also down 4.8%, at 120,900 won. Hanwha Aerospace and Hanwha Systems were also showing declines of around 4% and 6%, respectively, highlighting the overall weakness in major defense stocks. LIG Nex1’s share price was nearing a 15% drop.
This trend follows a report by The New York Times that US President Donald Trump may hold a summit with Russian President Vladimir Putin as early as next week, and that a trilateral meeting including Ukrainian President Volodymyr Zelensky could be pursued immediately afterward. Shortly after, the Kremlin also confirmed news of an agreement for a meeting between President Putin and President Trump.
Expectations that diplomatic efforts to end the war in Ukraine could accelerate following the US-Russia summit have led to selling pressure on defense stocks. In addition, profit-taking by investors following previous share price gains has further increased downward pressure.
In the case of LIG Nex1, a downgrade in investment ratings by major securities firms, including Korea Investment & Securities, due to earnings that fell short of market expectations, is also believed to have contributed to the double-digit decline.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
