Defense, Oil Stocks Surge Despite 8% Pre-Market Plunge

Despite an 8% plunge in KOSPI pre-market trading following U.S. airstrikes on Iran, defense and oil refining stocks are surging, creating a divergent market.

According to NextTrade data as of 8:30 a.m. on the 4th, Hanwha Systems rose 14.79%, Hanwha Aerospace gained 10.96%, LIG Nex1 jumped 21.94%, and S-Oil climbed 19.32%. These stocks also ranked 3rd, 4th, 5th, and 7th respectively in pre-market trading volume.

Defense and oil refining stocks showed strength even during the previous day's KOSPI plunge. LIG Nex1 hit the daily upper limit in regular trading, while S-Oil surged 28.45%.

International oil prices are spiking as the Strait of Hormuz faces blockade following U.S. airstrikes on Iran. President Donald Trump mentioned U.S. military intervention and safe passage guarantees for the strait, but inflation concerns from rising oil prices persist. Observers expect rate cuts may be delayed due to rising prices.

Analysts forecast that war-related beneficiary stocks will continue to attract attention while KOSPI undergoes a sharp correction. Lee Han-gyeol, a researcher at Kiwoom Securities, said, "Even after the Iran situation stabilizes, tensions surrounding religious and regional hegemony in the Middle East are unlikely to ease in the short term." He added, "While domestic defense contractors' stock volatility is expected to increase in the short term depending on the war's timeline, expansion of order pipelines is expected to drive an upward trend in stock prices from a mid-to-long-term perspective."