SPY•SPY•Technology accounts for six of Asia’s 15 best-performing sectors in 2026 so far, while financials, energy, industrials and process industries account for the other nine. The article highlights defence, infrastructure and clean energy, while warning of government delays, price competition, inflation and interest-rate risks.
Rising defence spending and military modernization are driving demand for equipment and infrastructure, including transport links, energy grids and telecommunications. NATO members, representing 65% of global defence expenditure, committed in June 2025 to raise annual spending to 5% of GDP by 2035; global defence spending was 2.4% of GDP in 2025. South Korea supplied 8.6% of arms imported by European NATO members in 2021–25, ahead of Israel at 7.7% and France at 7.4%.
A forecast cited in the article puts global infrastructure investment through 2040 at $106 trillion, with Asia accounting for about 65%. Asian transport infrastructure could require $2.6 trillion annually through 2035, more than three times the roughly $800 billion annual average spent from 2020 to 2025. Order books at major Asian industrial and defence groups, including Larsen & Toubro, Hanwha Aerospace and China Railway Group, are several times annual revenue.
The article says energy-security concerns and oil prices above $100 a barrel could support demand for renewables, batteries, offshore wind and electric vehicles. It notes that Chinese EV makers BYD and Geely derive 43% and 23% of revenue abroad, respectively, while CATL gets 34% overseas. Risks include government delays and budget cuts, price competition, inflation, high energy costs and interest rates, as well as possible spillovers from a major AI pullback.
