Seoul: Seoul stocks experienced a significant decline Thursday as investor sentiment was rattled by U.S. President Donald Trump's renewed threat of strikes against Iran, which also led to a rise in 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, closing at 5,234.05. Trade volume was substantial, with 1.42 billion shares worth 32.95 trillion won (US$21.72 billion) changing hands. The market saw a significant imbalance, with 814 losers compared to 90 winners.
Institutional and foreign investors offloaded a net 1.45 trillion won and 136.43 billion won worth of shares, respectively, while individual investors bought a net 1.21 trillion won. The index initially opened over 1 percent higher, reflecting overnight gains on Wall Street amidst hopes for an end to the monthlong Middle East conflict, which began in late February following U.S.-Israeli strikes on Iran.
However, the market turned negative following Trump's prime-time announcement that the United States would intensify its actions against Iran "extremely hard over the next two to three weeks" and warned of possible strikes on Iranian energy facilities if a deal is not reached. This increased uncertainty led to a surge in global oil prices, with Brent crude rising over 4 percent to exceed $100 a barrel.
The Korea Exchange (KRX) activated a sell-side sidecar at approximately 2:46 p.m., temporarily halting program-driven sell orders in KOSPI futures for five minutes. A similar sell-side sidecar was triggered on the tech-heavy Korea Securities Dealers Automated Quotation (KOSDAQ) market, which finished down 5.36 percent at 1,056.34.
Kang Jin-hyuk, an analyst from Shinhan Securities, noted, "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. Risk-off sentiment is strengthening as expectations for a ceasefire fade." Losses were widespread, particularly impacting tech shares.
Market leader Samsung Electronics saw a decline of 5.91 percent to 178,400 won, while SK hynix dropped 7.05 percent to 830,000 won. Hyundai Motor fell 4.61 percent to 465,500 won, and Kia decreased 3.03 percent to 150,600 won.
LG Energy Solution decreased by 0.61 percent to 404,500 won, while POSCO fell 1.45 percent to 341,000 won. Doosan Enerbility, a nuclear power plant builder, plummeted 6.02 percent to 93,600 won, and KB Financial dropped 1.21 percent to 146,500 won.
Shipbuilders also faced declines, with HD Hyundai Heavy falling 2.77 percent to 439,000 won and Hanwha Ocean dropping 6.06 percent to 119,300 won. In the bio sector, Samsung Biologics rose 0.83 percent to 1,585,000 won, while Celltrion fell 4.51 percent to 196,700 won.
Among the gainers, Hanwha Aerospace surged 6.3 percent to 1,417,000 won, and Samsung SDI advanced 2.55 percent to 443,000 won. The local currency closed at 1,519.7 won against the U.S. dollar, declining by 18.4 won from the previous session's close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys increased by 10.7 basis points to 3.477 percent, while the yield on the benchmark five-year government bonds rose by 11.2 basis points to 3.679 percent.