Seoul: Seoul shares experienced significant declines late Monday morning, driven by a downturn in chipmaker stocks, despite gains on Wall Street, as renewed tensions in the Middle East impacted investor sentiment.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) opened 0.85 percent lower and continued to fall, dropping 392.53 points, or 5.25 percent, to 7,083.41 by 11:20 a.m. This decline followed fresh military exchanges between the United States and Iran over the status of the Strait of Hormuz. On Sunday (U.S. time), the U.S. military launched strikes against Iran in response to Iran's drone attacks on U.S. allies in the Middle East.
In contrast, U.S. stocks showed an upward trend on Friday, boosted by South Korean chipmaker SK hynix's significant U.S. share offering. The Dow Jones Industrial Average and the Nasdaq composite both gained 0.29 percent. SK hynix's American depositary receipts (ADRs) on the Nasdaq closed at US$168 each, surpassing the offering price of $149.
In the Seoul market, institutions and foreigners sold a net 501.77 billion won (US$333 million) and 906.28 billion won worth of stocks, respectively, while individuals purchased a net 1.38 trillion won in stocks. The drop was led by tech stocks, with market leader Samsung Electronics falling 5.09 percent and SK hynix plunging 9.08 percent.
Other notable movements included a 2.24 percent decline for flag carrier Korean Air and a 1.65 percent drop for defense firm Hanwha Aerospace. Some companies, however, saw gains, with top carmaker Hyundai Motor rising 0.22 percent and Hyundai Steel climbing 4.09 percent. The Korean won was trading at 1,505.35 won against the U.S. dollar at 11:20 a.m., a decrease of 6.85 won from the previous session.