Seoul shares down as failed peace talks fuel concerns over prolonged war
Seoul, April 13
South Korean stocks traded lower on Monday as investor concerns grew over a prolonged conflict in the Middle East after the U.S.-Iran peace talks failed to make progress, while U.S. President Donald Trump threatened a blockade of the Strait of Hormuz.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 68.15 points, or 1.16 percent, to 5,790.72 as of 11:20 am (local time), reports Yonhap news agency.
President Trump announced a blockade of Iranian ports following marathon talks between Washington and Tehran in Islamabad over the weekend that ended without progress. The U.S. military said the measure would take effect at 10 a.m. Monday (U.S. time).
"The breakdown in the talks and the possible U.S. blockade of the Strait of Hormuz could fuel uncertainties, intensifying concerns over global supply chains," said Seo Sang-young, an analyst at Mirae Asset Securities.
In Seoul, market bellwether Samsung Electronics fell 2.31 percent and Hanmi Semiconductor, a major chip equipment manufacturer, dipped 2.8 percent.
Shipbuilders also traded lower, with HD Hyundai Heavy Industries declining 2.11 percent and Hanwha Ocean dropping 2.19 percent.
Bio giant Samsung Biologics decreased 1.27 percent, and Celltrion retreated 2.2 percent.
However, food giant CJ Cheiljedang added 0.84 percent, and Samyang Foods, best known for the global hit Buldak ramyeon series, jumped 4.85 percent.
The South Korean won weakened markedly against the U.S. dollar. The won opened at 1,495.4 per dollar, down 12.9 won from the previous session's close.
The currency has shown heightened volatility in recent sessions, in line with developments in the Middle East conflict that began in late February, as rising oil prices have fuelled concerns over inflation and a potential economic slowdown.
Higher oil prices have pressured the won by increasing demand for dollars for crude imports as South Korea relies heavily on imports for energy.
The dollar index, which measures the value of the U.S. dollar against a basket of six major currencies, rose 0.4 percent to 99.04.
— IANS
Reader Comments
Interesting to see food stocks like Samyang going up even when everything else is down. People still need to eat, I guess! Buldak ramyeon is a global phenomenon now. Shows the power of a strong consumer brand.
The Strait of Hormuz blockade is a serious escalation. This will directly impact oil shipments to India. Our government should be proactive in securing alternative supplies and calming the market. Jai Hind.
While the focus is on stocks, the real story is the weakening won. It shows how interconnected currencies are. A strong dollar hurts emerging markets like India as well, making imports more expensive.
Semiconductor and shipbuilding stocks down. These are key sectors for Korea, just like IT and pharma are for us. A lesson in diversifying our own economic pillars. Global events can hit any sector hard.
With respect, I think the article misses the human cost. Beyond stock points and percentages, failed peace talks mean more suffering for people in the region. Our foreign policy should prioritize diplomacy, always.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.