Asian defence stocks retreated on Tuesday as broader regional markets displayed mixed trading amid heightened geopolitical uncertainty following recent events involving Donald Trump’s military operation in Venezuela and renewed strategic rhetoric concerning Greenland. Markets in Australia, Japan, South Korea and China reflected investor caution as risks spanning geopolitics and inflation data weighed on sentiment.
Major defence-related equities in Japan and South Korea led declines in the sector. Shares of Kawasaki Heavy Industries slid around 1.1%, while Korea Aerospace fell 1.6% and Poongsan Corporation lost nearly 5%. Hanwha Aerospace also retreated more than 1%. Analysts attributed the pullback to profit-taking following recent gains, as well as investors reassessing risk appetite amid geopolitical developments.
Regional stocks outside defence reflected the mixed trading backdrop. Australia’s benchmark S&P/ASX 200 rose modestly after local inflation data showed consumer prices rising 3.4% year-on-year in November, below market forecasts and softer than October’s 3.8%, suggesting cooling price pressures. The data renewed speculation that interest rate hikes could be paused.
In contrast, Japan’s Nikkei 225 and broader Topix indices both declined, weighed down by losses in cyclical and export-oriented names. South Korea’s Kospi index bucked the trend with a moderate gain, while the Kosdaq edged lower. Hong Kong’s Hang Seng Index also slipped, even as mainland Chinese markets posted modest advances.
Elsewhere in markets, shares of Hyundai Motor Company jumped over 11% on reports the firm plans to deploy humanoid robots at manufacturing sites in the United States by 2028, extending the company’s recent rally.
Commodities and futures traded with caution. U.S. crude oil futures fell about 1.3% as traders digested remarks from Trump that Venezuela would transfer millions of barrels of oil to the United States, part of broader geopolitical developments after U.S. forces seized former Venezuelan leader Nicolas Maduro. Meanwhile, U.S. stock benchmarks closed at record highs overnight, brushing aside geopolitical tensions to focus on resilience in technology and growth sectors.
Investors remain alert to geopolitical risks, with market analysts noting that recent sharp policy moves and territorial rhetoric could inject volatility into global financial markets.
