FINANCIAL MARKETS are never more ghoulish than in times of bloodshed. As soon as a missile is fired somewhere in the world, they start gauging not just losses but potential opportunities for profit. Even for believers in the efficiency of capitalism, the process is icky to behold. It is again on display amid the American-Israeli war against Iran.
The obvious winners (besides energy firms benefiting from surging oil and gas prices) are armsmakers. On March 2nd American defence stocks rose by 3%. In Europe, firms like BAE Systems and Hensoldt bucked a broader equity sell-off. Across the rich world, weapons-makers are up by 52% over the past 12 months. Some have done much better. Hanwha Aerospace of South Korea and Kraken Robotics, a Canadian maker of sonar, have increased their market value more than ten-fold since the start of 2024. In venture capital, defence seems as hot as artificial intelligence.
