Asian defense-related equities declined on Wednesday, snapping a two-day rally as geopolitical uncertainties intensified. The shift followed renewed U.S. rhetoric regarding Greenland, adding to market caution after the recent military action in Venezuela.

Key defense players saw losses: Japan's Kawasaki Heavy Industries fell 1.1%, while South Korea's Korea Aerospace dropped 1.62%, Poongsan plunged 4.98%, and Hanwha Aerospace retreated 1.76%. The sell-off was triggered by White House press secretary Karoline Leavitt's statement that the Trump administration is evaluating "a range of options" to acquire Greenland, including the potential use of military resources.

Broader Asian markets displayed a mixed performance. Australia's ASX/S&P 200 gained 0.38% after domestic inflation data for November came in softer than expected, with the CPI rising 3.4% year-over-year, below forecasts of 3.7%. The data eased concerns about near-term interest rate hikes.

Japan's Nikkei 225 slipped 0.45%, and the Topix index fell 0.63%. In contrast, South Korea's Kospi surged 1.89%, buoyed by a more than 11% jump in Hyundai Motors shares after the company announced plans to deploy humanoid robots in its U.S. factories starting in 2028. Hong Kong's Hang Seng Index dipped 0.43%, while mainland China's CSI 300 edged up 0.13%.

In commodities, U.S. crude oil futures fell 1.3% to $56.39 per barrel following President Trump's comments that Venezuela would transfer up to 50 million barrels of oil to the United States in the wake of the operation that captured former leader Nicolás Maduro.

U.S. equity futures were steady in early Asian trading after Wall Street reached record highs overnight, with investors appearing to initially look past the Venezuela developments.