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Seoul Stocks Fall as Oil Swings on Iran's Hormuz Blockade Vow

South Korean stocks traded lower as global crude oil prices experienced significant volatility following Iran's vow to maintain a blockade of the Strait of Hormuz. Major tech companies like Samsung Electronics and SK hynix saw their shares decline, while construction firms involved in nuclear power plants surged due to energy supply concerns. The Korean won also weakened against the U.S. dollar amidst the market turbulence. Meanwhile, the government implemented a temporary fuel price cap system to ease cost burdens from the ongoing Middle East crisis.

Key Points: Seoul Shares Drop Amid Oil Volatility from Hormuz Blockade

  • KOSPI falls 1.37%
  • Oil prices volatile amid Hormuz blockade
  • Tech giants Samsung and SK hynix decline
  • Nuclear plant builders surge on demand
2 min read

Seoul shares down as oil swings on prolonged Hormuz blockade

South Korea's KOSPI falls as crude prices swing. Tech and finance stocks decline while construction firms rise on nuclear power demand.

"global crude prices have swung back to the $100 level after extreme volatility - Yonhap news agency"

Seoul, March 13

South Korean stocks trimmed losses late on Friday morning but continued to trade in negative territory as global crude prices fluctuated after the new Iranian leader vowed to keep the blockade of the Strait of Hormuz.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 76.62 points, or 1.37 percent, to 5,506.63 as of 11:20 a.m.

Global crude prices have swung back to the $100 level after extreme volatility, with disruptions at the key waterway in the Middle East showing no signs of easing despite U.S. President Donald Trump's claim the war is nearing an end, reports Yonhap news agency.

In Seoul, top tech giant Samsung Electronics slipped 1.76 percent, and SK hynix lost 1.08 percent.

Due to global oil supply disruptions, investors scooped up nuclear power plant builders, with Daewoo Engineering & Construction soaring 24.19 percent and Hyundai Engineering & Construction adding 5.27 percent.

Financial firms traded bearish, with KB Financial falling 0.54 percent and Shinhan Financial losing 1.31 percent.

Top online portal giant Naver edged up 0.11 percent, and Kakao remained unchanged at 50,400 won.

The Korean won was trading at 1,486.7 won against the U.S. dollar, down 5.5 won from the previous session.

Industry Minister Kim Jung-kwan on Friday urged oil refineries and gas stations to cooperate with the government's fuel price cap system introduced to ease cost burdens in the wake of the Middle East crisis.

Kim made the call in a meeting with officials from South Korean oil refineries, gas stations and the Korea National Oil Corp. held on the first day of the fuel price cap system implementation, according to the Ministry of Trade, Industry and Resources.

The temporary cap system took effect at midnight Thursday, setting maximum prices of products oil refineries supply to gas stations and distributors.

The initial price ceiling was set at 1,724 won (US$1.16) per litre for regular gasoline, 1,713 won per litre for diesel and 1,320 won per litre for lamp oil.

- IANS

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Reader Comments

P
Priya S
Seeing South Korea cap fuel prices is interesting. With petrol prices already so high in India, I hope our policymakers are watching and learning. A temporary cap during a crisis can provide much-needed relief to the common man. 🛢️
R
Rohit P
The surge in nuclear power plant builder stocks is the key takeaway. Every geopolitical tension in the Middle East pushes the world closer to embracing nuclear and renewable energy for true energy security. India's focus on solar and nuclear is the right long-term path.
S
Sarah B
While price caps sound good in theory, they can distort the market and lead to shortages if not managed perfectly. The Korean minister's "urge" for cooperation suggests enforcement might be weak. India has experience with fuel subsidies; the challenge is always fiscal responsibility.
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Vikram M
It's not just about oil. Look at Samsung and SK hynix falling. A major supply chain disruption affects tech, which affects everything. Many of our Indian startups and manufacturing units depend on components from that region. We need to diversify our import sources, yaar.
N
Nikhil C
The article mentions the won losing value against the dollar. This is the silent killer for economies like ours. When the dollar strengthens due to global uncertainty, it makes our imports (like oil) even more expensive. RBI has a tough job ahead managing the rupee.

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