Seoul: Seoul stocks fell sharply Thursday, as U.S. President Donald Trump's renewed threat of strikes against Iran rattled investor sentiment and pushed up global oil prices. The Korean won weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell 244.65 points, or 4.47 percent, to 5,234.05. The index had opened more than 1 percent higher, riding on overnight gains on Wall Street. This initial optimism was driven by hopes for an end to the monthlong war in the Middle East, which began in late February following U.S.-Israeli strikes on Iran.
However, the situation quickly deteriorated after Trump stated in a prime-time address that the United States would hit Iran "extremely hard over the next two to three weeks" and "bring them back to the Stone Age." He also warned that Iranian energy facilities could be targeted if a deal is not reached. This renewed uncertainty pushed up global oil prices, with Brent crude jumping more than 4 percent to well over $100 a barrel.
The Korea Exchange (KRX), the country's main bourse operator, activated a sell-side sidecar at around 2:46 p.m., temporarily halting program-driven sell orders in KOSPI futures for five minutes. "Despite earlier remarks by U.S. and Iranian leaders suggesting the possibility of an end to the conflict, Trump's latest message indicating the war could continue disappointed investors," Kang Jin-hyuk, an analyst from Shinhan Securities, said. "Risk-off sentiment is strengthening as expectations for a ceasefire fade."