Seoul: South Korean stocks plunged more than 7 percent Tuesday, closing below the 5,800-point mark as investor sentiment was dampened by escalating geopolitical concerns triggered by the ongoing Middle East conflict. The Korean won also lost sharply against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) tumbled 452.22 points, or 7.24 percent, to close at 5,791.91, marking the lowest closing price since February 20. On that date, the index finished at 5,808.53. The Korea Exchange (KRX), the country's main bourse operator, issued a sell-side sidecar for five minutes around noon, suspending the selling of KOSPI futures.
The trade volume was heavy at 1.2 billion shares worth 52.5 trillion won (approximately US$35.8 billion). Losers sharply outnumbered winners, with 840 stocks declining compared to only 73 advancing. Foreign and institutional investors led the daily sell-off, offloading a net 5.1 trillion won and 891.1 billion won, respectively, while retail investors engaged in bargain hunting, purchasing a net 5.8 trillion won.
Coordinated U.S. and Israeli airstrikes on Iran over the weekend unsettled global markets from the start of this week. However, the Korean market remained closed on Monday in observance of the March 1 Independence Movement Day holiday. Roh Dong-gil, an analyst at Shinhan Securities, stated, "The main index experienced expanded volatility as the Middle East risk was realized after a long weekend. The stock market is expected to be affected by oil prices and interest rates as the situation develops."
Most shares closed bearish, with market bellwether Samsung Electronics tumbling 9.88 percent to 195,100 won and its chipmaking rival SK hynix plummeting 11.5 percent to 939,000 won. Top automaker Hyundai Motor dived 11.72 percent to 595,000 won, while leading battery maker LG Energy Solution sank 7.96 percent to 393,000 won.
Travel shares were among the biggest losers, as flag air carrier Korean Air nosedived 10.32 percent to 25,200 won, and major travel agency Hana Tour Service lost 6.65 percent to 44,900 won. KB Financial Group, a leading banking group, fell 3.46 percent to 153,500 won, and major pharmaceutical firm Celltrion dropped 5.66 percent to 225,000 won.
However, oil refinery and defense shares were bullish. Leading refinery firm SK Innovation rose 2.51 percent to 130,900 won, and S-Oil, whose largest shareholder is Saudi Aramco, surged 28.45 percent to 141,300 won. Defense giant Hanwha Aerospace soared 19.83 percent to 1.43 million won, and LIG Nex1 surged 29.86 percent to 661,000 won.
The Korean won was quoted at 1,466.1 won against the U.S. dollar at 3:30 p.m., down 26.4 won from the previous session's close.