Construction stocks surged across the board early on the 1st. Buying appears to have poured in as hopes for an end to the war between the United States and Iran spread. The view that construction would benefit as the war underscored the importance of energy security also seemed to influence investor sentiment.
As of 9:59 a.m. that day, Daewoo Engineering & Construction was trading at 18,560 won, up 3,010 won (19.36%) from the previous session on the Korea Exchange. At the same time, GS Engineering & Construction was also up 2,850 won (11.35%) at 27,950 won.
Hyundai Engineering & Construction (11.47%), DL E&C (8.38%), and KCC E&C (6.98%) were also strong.
On the 31st (local time), Iran President Masoud Pezeshkian said in a call with European Union (EU) Council President António Costa that "there is a will to end the war." Afterward, U.S. President Donald Trump also hinted at the possibility of an end to the war, saying "we can end the operation in two weeks, maybe a few weeks."
Brokerages offered a positive outlook for construction stocks in connection with the war.
Jang Moon-jun, an analyst at KB Securities, said, "A trend is emerging in which various energy infrastructure, including nuclear power, gas and liquefied natural gas (LNG), and clean energy, is expanding simultaneously across the globe," adding, "Beyond simple overseas orders, this global energy cycle could become a new theme driving the share prices of Korea's construction stocks."
Kim Seung-jun, an analyst at Hana Securities, said, "If a cease-fire and nuclear talks proceed smoothly, Samsung E&A and DL E&C are expected to benefit from the reconstruction and Iran development themes," adding, "If oil prices recover on a short-term truce, domestic housing stocks are likely to benefit as concerns over materials prices and supply-demand ease."