Reports of a possible halt in US-North Korea talks send defense stocks soaring

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Reports of a possible halt in US-North Korea talks send defense stocks soaring

U.S. President Donald Trump walks with North Korean leader Kim Jong Un during a break in talks at the U.S.-North Korea summit in Hanoi on February 28, 2019.










Saul Loeb | AFP | Getty Images

U.S. President Donald Trump walks with North Korean leader Kim Jong Un during a break in talks at the U.S.-North Korea summit in Hanoi on February 28, 2019.

Defense-related stocks listed in South Korea and Japan surged by more than 20 percent on Friday following reports that North Korea may suspend nuclear talks with the U.S.

North Korea plunged.

North Korean Vice Foreign Minister Choe Son Hui said at a news conference that her country has “no intention to yield” to demands made by the U.S. She added that North Korean leader Kim Jong Un could rethink a moratorium on missile launches and that he will make an official announcement soon on his position regarding talks with the U.S.

Kim met U.S. President Donald Trump last month in the Vietnamese capital of Hanoi. The two-day summit was cut short on the final day after both side failed to agree on denuclearizing North Korea and lifting economic sanctions on Pyongyang.

After Choe’s comments were reported on Friday, shares of several Asia-listed defense companies jumped.

In South Korea, shares of Victek and Hanil Forging Industrial had risen 24.07 percent and 20.62 percent, respectively, by Friday’s close. Over in Japan, Ishikawa Seisakusho ended the session 25.64 percent higher.

Meanwhile, South Korean stocks exposed to North Korea plunged after the news: Hanil Hyundai Cement ended Friday 8.77 percent lower, and Hyundai Elevator declined by 6.9 percent.

In broader markets, South Korea’s Kospi closed 0.95 percent higher and Japan’s Nikkei 225 index rose 0.77 percent. In the currencies space, the Korean won weakened against the U.S. dollar by around 0.1 percent, while the Japanese yen — typically seen as a safe haven — traded flat against the greenback.

— Reuters contributed to this report.

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