On November 5, shares of defense companies, including Hanwha Aerospace and LIG Defense & Aerospace, fell between 3% and 10% following election losses for U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu.
According to the Korea Exchange, as of 9:40 a.m., Hanwha Aerospace was trading at 699,000 won, down 37,000 won (4.9%) from the previous day.
The decline in Hanwha Aerospace's stock reflects concerns that a potential Democratic takeover of both chambers of Congress in the U.S. midterm elections could hinder the Trump administration's plans for significant increases in defense spending.
With the new Congress set to convene in January, there is a high likelihood that the proposed $350 billion in additional defense spending by the Trump administration will face obstacles. According to Eugene Investment & Securities, the U.S. Department of Defense has requested a defense budget of $1.45 trillion for the fiscal year 2027, of which $350 billion will require congressional negotiation.
Netanyahu, who initiated the recent conflict in the Middle East, also failed to secure a majority in the Knesset during the elections held on October 27. Analysts suggest that he may struggle to regain power due to losing control in coalition negotiations with opposition parties.
In light of these concerns, LIG Defense & Aerospace was trading at 383,000 won, down 37,000 won (8.80%) from the previous trading day. Hanwha Solutions also saw a decline, trading at 27,200 won, down 800 won (3.04%) as of 9:40 a.m.
However, Hanwha Aerospace showed a stronger performance compared to other defense stocks, buoyed by news of a confidential order worth 1.5 trillion won, trading at 1,075,000 won, down 13,000 won (1.29%) from the previous day.
* This article has been translated by AI.
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