Defense manufacturing firms saw sudden surge in their stocks in Asia on Wednesday, soaring by 20% in some, following the break out of war clouds with Iran attacking multiple American bases in Iraq.
South Korean weapons manufacturer Victek shares in the market rose as high as 26%, while another firm Hanil Forging Industrial saw its stock jumping to 21% on Wednesday. Others like Speco too spiked by 18%. Close on the heels, neighbouring Japanese firm Ishikawa Seisakusho, which manufactures land mines, saw a sudden surge of 24% in its shares, followed by Tokyo Keiki, which produces navigation systems for military use, by more than 13%. Both stocks have registered a new 52-week high on Wednesday. Another Japanese company, Howa Machinery that supplies rifles and mortars, was up by 16%.
In China too, similar trends were registered on Wednesday morning with shares of its defense companies rising by the daily maximum limit of 10% such as Anhui Great Wall Military Industry, Linzhou Heavy Machinery Group, Tianjin Motor Dies and Aerospace CH UAV.
Iran's attacks also jolted global markets with US futures plunging and echoing similar sentiments in Asian markets in Asia on Wednesday, with gold and oil prices soaring up.
European markets tumble
European shares dropped on Wednesday amid fears of a military escalation in the Middle East. The pan-European STOXX 600 equity index was down 0.5% by 0807 GMT, with German stocks .GDAXI leading declines, reports Reuters. The chemicals subindex .SX4P was the worst performer, while oil and gas stocks .SXEP rose tracking higher crude prices on the prospect of supply disruptions in the Middle East.
As reported already, Iran had launched more than a dozen ballistic missiles against two Iraqi military bases at Al-Assad and Irbil, where the American troops are hosted as a retaliatory action against US killing of Iran's top military commander, Qasem Soleimani, last week.
"Any adverse military action by the US will be met with an all out war across the region. The Saudis, however, could take a different path - they could have total peace!" warned Iranian official Hessameddin Ashena, an adviser to Iranian President Hassan Rouhani on Twitter.
Tehran and Riyadh have been involved in proxy wars across the region for decades, from Iraq to Syria and Yemen, though Iran has repeatedly sought to improve ties with the kingdom.