As of 11:01 a.m., Hyundai Rotem was down 23,000 won, or 8.78%, at 239,000 won, according to the Korea Exchange. Hanwha Aerospace fell 5.23%, Korea Aerospace Industries dropped 3.57%, and LIG Defense & Aerospace declined 1.84%.
The declines were widely attributed to reports that negotiations between the United States and Iran were gaining momentum, shrinking the geopolitical premium that had supported the sector as Middle East risks intensified.
U.S. online outlet Axios reported on May 6 (local time), citing multiple sources, that the United States and Iran were close to signing a one-page memorandum of understanding laying out a basic framework to end the war and address the nuclear issue. While no final agreement has been reached, Axios said the talks were at their most advanced stage since the war began on Feb. 28.
U.S. President Donald Trump, in an interview the same day with public broadcaster PBS, said he believed a deal with Iran was possible, adding that there was a “very high” chance of reaching an agreement. He also mentioned the possibility of a deal before his planned visit to China on May 14-15.
In the market, concerns have grown that order momentum for defense companies could cool after shares jumped on expectations the war would be prolonged. Institutional and foreign investors were seen concentrating profit-taking in stocks that had posted the biggest recent gains.
* This article has been translated by AI.
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