ETF Market Trends Amid Rising Middle East Tensions
On the 3rd, the defense sector in the ETF market stood out by recording high returns. Notably, the TIGER K Defense & Space ETF rose by 16.60%, reflecting expectations of increased demand for the defense industry amid heightened tensions in the Middle East following U.S. and Israeli airstrikes on Iran. Conversely, South Korea’s main stock index, KOSPI, dropped by 7.24%, with major semiconductor companies like Samsung Electronics and SK Hynix seeing declines of 9% and 11% respectively, thus causing struggles for semiconductor ETFs.
The international crude oil prices surged due to the military tensions in the Middle East, leading to significant losses for leveraged inverse products betting on a decline in oil prices. Brent crude futures rose by 6.7%, while inverse ETNs saw double-digit declines and increased trading volumes. According to NH Investment & Securities, although there are currently no actual supply disruptions, preparation for potential worsening geopolitical situations is advised.
Iran's potential blockade of the Strait of Hormuz poses a major threat to oil price stability. Experts warn that if the strait is blocked, oil prices could exceed $100 per barrel, with worst-case scenarios suggesting prices might rise to $150. This risk accelerates the rise of crude oil-related ETFs, while defense ETFs also benefit from the instability in the Middle East.
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Panic Selling of Leveraged ETFs Amid Rising Oil Prices - NewsPim[Seoul=NewsPim] Reporter Lee Na-young= As international oil prices soared amid heightened military tensions in the Middle East, the 2x inverse (leveraged) products, which had been betting on a decline in oil prices, fluctuated significantly. On the first trading day following the escalation of US-Iran tensions, some products fell by about 17-20%,
U.S.-Iran Conflict Escalation: Safe Havens as Oil and Defense ETFs Surge [Oil Shock from Middle East]Concerns over Hormuz blockade lead to a 10% surge in oil ETFs in one day. Market predicts oil prices will surpass $100. Chaos in the Hormuz Strait due to Iran's retaliatory attack fuels international concerns.
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