SEOUL—South Korean financial markets experienced significant declines on Friday, influenced by escalating military tensions between Israel and Iran, and speculation regarding U.S. monetary policy. The Korea Composite Stock Price Index (KOSPI) fell by 42.84 points, closing at 2,591.86, a drop of 1.63 percent, after initially plummeting over 3 percent during the day's trading.
According to Yonhap News Agency, the session saw a high trade volume of 799 million shares, valued at approximately 13.85 trillion won (US$10 billion). The majority of stocks ended the day lower, with 629 decliners outpacing 238 gainers. Despite this, foreign investors were net buyers, purchasing 343.9 billion won worth of stocks, while individual investors and institutions sold off significantly, with net sales of 925.6 billion won and 655.7 billion won, respectively.
This market response comes amid reports that Israel launched an attack on a target within Iran, exacerbating the conflict that began earlier in the month. Additional pressure on the stock market stemmed from concerns that the U.S. Federal Reserve might delay expected interest rate cuts, with some analysts suggesting a potential rate increase instead.
Major South Korean corporations saw notable declines in their stock values. Samsung Electronics dropped by 2.51 percent to 77,600 won, and SK hynix, the second-largest chipmaker, fell by 4.94 percent to 173,300 won. Financial institutions like KB Financial and Shinhan Financial also saw decreases in their share prices.
The pharmaceutical sector was not spared, with significant losses noted for Samsung Biologics and Celltrion, declining by 1.14 percent and 2.37 percent, respectively. Transport stocks also suffered, with Korean Air Lines and Asiana Airlines witnessing falls in their share prices.
The Korean won depreciated significantly against the U.S. dollar, closing at 1,382.2 won, down 9.3 won from the previous session. Bond markets reacted similarly, with yields on three-year and five-year government bonds rising, reflecting lower bond prices.