Seoul: South Korean stocks ended their seven-day winning streak on Friday as escalating tensions in the Middle East increased investors’ risk-off sentiment, causing the local currency to trade significantly lower against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped 25.41 points, or 0.87 percent, concluding at 2,894.62. This decline comes after the KOSPI had enjoyed a seven-day rally, surpassing the 2,900-point level for the first time in over three years. The trading volume was substantial, with 921 million shares valued at 17.2 trillion won (US$12.6 billion), and the number of declining stocks outpaced advancing ones by 763 to 149.
Institutional investors sold off 610.9 billion won worth of local shares, overshadowing the purchases by foreign and retail investors, which amounted to 121.2 billion won and 466.9 billion won, respectively. Meanwhile, U.S. markets closed higher as inflationary pressures eased and interest rates remained stable, with the Dow Jones Industrial Average and the tech-heavy Nasdaq composite both rising by 0.24 percent, and the S and P 500 increasing by 0.38 percent.
Investor sentiment was negatively impacted by Israel’s preemptive strike on Iran, with Israeli officials confirming a series of airstrikes against nuclear and military targets in Tehran. Additionally, the Trump administration’s plan to impose 50 percent steel tariffs on imported household appliances, including dishwashers, washing machines, and refrigerators, further dampened investor confidence. The expanded tariff, set to take effect on June 23, is expected to impact major South Korean companies such as Samsung Electronics and LG Electronics.
In the Seoul market, tech giant Samsung Electronics fell 2.02 percent to 58,300 won, while competitor LG Electronics dropped 3.99 percent to 72,200 won. Leading automaker Hyundai Motor and its affiliate Kia saw declines of 1.24 percent and 1.22 percent to 199,000 won and 97,200 won, respectively. LG Energy Solution, a major battery manufacturer, also decreased by 2.63 percent to 296,000 won.
Bio shares were weak as well, with Samsung Biologics slipping 0.97 percent to 1.01 million won and Celltrion declining 1.89 percent to 160,800 won. Conversely, defense companies saw gains amid the Middle East crisis, with Poongsan surging 22.15 percent to a record high of 107,000 won and LIG Nex1 rising 14.35 percent to 526,000 won. Hyundai Rotem also increased by 3.95 percent to 186,800 won.
In other sectors, major shipbuilder HD Korea Shipbuilding rose 2.94 percent to 350,500 won, and leading shipper HMM increased by 5.22 percent to 24,200 won. The local currency was trading at 1,369.6 won against the U.S. dollar at 3:30 p.m., marking a decrease of 10.9 won from the previous session. Bond prices, which move inversely to yields, fell, with the yield on three-year Treasurys rising 3.3 basis points to 2.462 percent, and the yield on benchmark five-year government bonds increasing 1.6 basis points to 2.597 percent.