US approves $10bn-plus arms sales to Taiwan, China defence stocks index hits 2 mth high

The U.S. has approved over $10 billion in arms sales to Taiwan, escalating U.S.-China tensions. The package includes advanced weaponry such as HIMARS and ATACMS, expected to enhance Taiwan's defense capabilities while prompting a sharp response from Beijing. Following the announcement, China's defense stocks surged, reflecting market anticipation of increased domestic defense spending. This situation highlights the intensifying geopolitical risks in the region, particularly with rising military activities. The arms sales reinforce U.S. support for Taiwan without altering existing policies but raise stakes in cross-strait relations. As geopolitical tensions heighten, investors should remain vigilant regarding market implications across Asia.