08.05.2025 11:41
The increasing geopolitical tension between India and Pakistan has led to a rise in the shares of defense and aerospace companies in Asia. Investors have increased their stock purchases, taking into account forecasts that conflicts between the two countries will boost defense spending.
The increasing tension between India and Pakistan is positively reflecting on the shares of defense and aerospace companies in Asia, while the flow of news related to the issue is affecting the direction of the shares. The geopolitical tensions between India and Pakistan are causing an increase in geopolitical risks globally. India conducted missile strikes on May 6 against Pakistani territories and the Azad Kashmir region controlled by Pakistan, citing retaliation for a terrorist attack on April 22 in the Pahalgam region that killed 26 people.
CONFLICTS ARE ESCALATING DAY BY DAY
The Indian army announced that it successfully hit 9 targets it described as "terrorist organizations," while the Islamabad administration reported that 6 civilian locations were targeted, stating that 26 people lost their lives and 46 were injured in the attacks. The Pakistan army claimed to have shot down 5 fighter jets during the Indian attack, while the New Delhi administration stated that this was not true.
AEROSPACE SHARES ON THE RISE
It was reported that 12 people lost their lives in Jammu Kashmir, administered by India, during Pakistan's cross-border attacks. Pakistan's Defense Minister Khawaja Muhammad Asif stated that the escalation of tensions could lead to nuclear war. The increasing tension between the two countries has caused a rise in the shares of defense and aerospace companies in Asia. According to data compiled by AA correspondent from the price movements of defense industry companies on the stock exchanges on May 6-7, during this period, South Korean companies Hanwha Aerospace gained 8.8%, HLB Co gained 2.4%. Japanese Mitsubishi Heavy's shares rose by 1.9%. Another South Korean company, HD Hyundai Heavy Industries Co, gained 1.7%, Singapore-based Singapore Technologies Engineering gained 1.3%, and Chinese AVIC Xi'an Aircraft Industry Group Company gained 1%.
INCREASE IN DEFENSE SPENDING EXPECTED
It is anticipated that the increase in geopolitical risks in the region will lead Asian defense industry companies to focus more on defense spending and investments. The rising tensions in Asia did not reflect on the stock prices of US and Europe-based companies. Looking at the performance of US and Europe-based companies on the stock exchanges, it was observed that shares of US-based L3 Harris Technologies increased by 0.8%, and Lockheed Martin's shares increased by 0.7%. Swedish Saab increased by 0.2%, US-based Boeing by 0.2%, Northrop Grumman by 0.3%, French Thales by 0.4%, Italian Leonardo by 0.4%, and US companies General Dynamics by 0.4%, RTX Corporation by 0.5%, and French Safran by 0.5% lost value. Shares of German Rheinmetall AG decreased by 0.7%, shares of European multinational aerospace company Airbus decreased by 1.3%, British companies Rolls-Royce's shares decreased by 2%, BAE Systems' shares by 2.3%, German Lufthansa's shares by 3.9%, and French Dassault Aviation's shares by 5.2%.