[Market Focus] Escalation in Iran Crisis... Construction Stocks Tumble Together

Amid the armed conflict between the United States and Iran, domestic construction stocks closed sharply lower. This decline was driven by growing concerns over shrinking orders and rising various costs, stemming from the spread of geopolitical risks.

On March 3, Daewoo Engineering & Construction closed at 8,900 won, down 1,240 won (-12.23%) from the previous trading day. Samsung C&T (-9.56%), Hyundai Engineering & Construction (-8.62%), GS Engineering & Construction (-4.69%), and DL E&C (-4.11%) also declined.

On this day, Kwon Youngbae, a researcher at Mirae Asset Securities, stated, "Concerns over order contraction have increased due to escalating Middle East geopolitical risks and fears of further escalation. If Iran's blockade of the Strait of Hormuz continues for an extended period, there are also concerns about rising raw material and logistics costs. It will likely become more difficult to secure and dispatch personnel locally, raising the possibility of construction delays and increased costs."

He added, "During the Iran-Israel crisis in June last year, the share prices of major large-scale construction companies underperformed due to related concerns. However, considering the regions involved in the overseas nuclear power value chain, which is currently driving the construction sector, the impact of the current situation is expected to be limited."

This content was produced with the assistance of AI translation services.