Shares in several of the world’s largest defence contractors sank on Monday as the chaotic withdrawal of US and NATO forces from Afghanistan led investors to reassess their commitments to beneficiaries of America’s military-industrial complex.
In early trading on Wall Street, Lockheed Martin (NYSE:LMT) Corp was down 0.3% at US$356.83, while Raytheon (NYSE:RTN) Technologies Corp dropped 1.5% to US$85.97 and Northrop Grumman (NYSE:NOC) Corp dipped 0.8% to US$360.34.
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Other firms with large defence operations were also on the decline, with Boeing Co (NYSE:BA) sinking 2.6% to US$228.30 while General Dynamics (NYSE:GD) Corp slipped 0.3% to US$197.72. Over in the UK, London-listed defence firm BAE Systems PLC (LSE:BA.) was down
The contraction on the markets for the world’s largest defence firms followed the rapid collapse of the US-supported Afghan government over the weekend, with forces of the Islamist Taliban insurgency entering the capital Kabul on Sunday.
The rapid Taliban advance sparked a rush by American and other foreign diplomats and civilians to hastily exit the country, with many commentators comparing the incident to a similarly rapid exit from the Vietnamese capital of Saigon in the 1970s.
With the Taliban now effectively in control, defence contractors are likely to face a US administration much more averse to expensive foreign interventions, in addition to the now-defunct Afghan army which was supplied with around US$88bn in US weapons and training.