Seoul: South Korean stocks fell nearly 6 percent Monday, with the main bourse operator temporarily suspending trading during the morning amid extreme market volatility caused by U.S.-Israeli airstrikes on Iran. The local currency fell sharply against the greenback.
According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) surrendered 333 points, or 5.96 percent, to close at 5,251.87. Trade volume was heavy at 1 billion shares worth 33 trillion won (US$22 billion), with losers far outpacing gainers 847 to 73. Individual investors bought a net 4.62 trillion won, while foreigners offloaded a net 3.18 billion won. Institutions sold a net 1.53 trillion won.
In the morning, the Korea Exchange (KRX) activated a circuit breaker, suspending all trading on the main bourse for 20 minutes after the main index stayed 8 percent below the previous session's level for one minute. It marked the second activation of a circuit breaker since last week, with the KRX issuing one on Wednesday when the KOSPI sank 12.06 percent, the steepest one-day decline since Sept. 12, 2001, in the aftermath of the Sept. 11 terrorist attacks in the United States. It was the first time a circuit breaker had been activated twice in a single month since March 2020, when the COVID-19 pandemic hit the market.
Shortly after the opening bell, the KRX also activated a sell-side sidecar, suspending sell orders for five minutes. The measure is triggered when the KOSPI 200 Futures index moves 5 percent or more for at least one minute. "Due to panic selling amid a contraction in investor sentiment, the KOSPI may surrender the 5,000-mark temporarily," Han Ji-young, a researcher at Kiwoom Securities, said, noting investors should continue to watch the direction of global crude prices.
The U.S. benchmark West Texas Intermediate (WTI) crude surpassed US$100 per barrel Sunday (U.S. time). "Tensions in the stock market are escalating as global crude prices have surpassed the psychologically significant level of $100," Lee Kyoung-min, a researcher at Daishin Securities, said, noting the main index's decline was limited as individuals hunted for bargains.
In Seoul, oil refiners closed bearish, with SK Innovation falling 5.36 percent to 118,200 won and S-Oil decreasing 0.77 percent to 128,700 won. Top market cap Samsung Electronics sank 7.81 percent to 173,500 won, and SK hynix dropped 9.52 percent to 836,000 won. Financial shares lost ground as well, with KB Financial dipping 3.26 percent to 142,600 won and Shinhan Financial decreasing 3.59 percent to 88,500 won. LG Energy Solution decreased 4.77 percent to 359,500 won, and Samsung SDI plunged 5.24 percent to 389,000 won.
POSCO International, a trading firm, moved up 4.5 percent to 76,600 won as investors were optimistic over the firm's energy business portfolio. The Korean won was trading at 1,495.5 won against the U.S. dollar, down 19.1 won from the previous session, as of 3:30 a.m.