WITH the possibility of escalating violence in Iraq, stocks in the defence sector could garner more attention this week.
The stock market and oil prices were rattled late last week after violence in the nation escalated as a Sunni insurgency against the government heats up. A continued escalation of the conflict could result in a civil war and a possible break-up of the country.
Escalation doesn’t necessarily mean investors will flock to defence stocks solely on expectations they will see a revenue boost as a result of an increase in new government contracts.
Americans are wary of getting re-involved in the fighting in Iraq given forces are still in the country after the US invasion in 2003 that has cost the lives of more than 100,000 civilians and several thousand soldiers. The defence index has gained 93 per cent in the last three years.