Seoul shares down 8 pc on Middle East tensions
Seoul, March 4
Seoul shares extended losses late on Wednesday morning, falling more than 8 per cent, as escalating concerns over the economic fallout from the Middle East conflict continued to weigh on investor sentiment.
After opening 3.44 per cent lower, the Korea Composite Stock Price Index (KOSPI) extended its losses, tumbling 468.98 points, or 8.1 per cent, to 5,322.93 as of 11:45 a.m., following a plunge of more than 7.24 percent the previous session.
The Korea Exchange (KRX) triggered circuit breakers shortly after the KOSPI fell more than 8 percent amid heightened geopolitical tensions, reports Yonhap news agency.
Earlier in the day, the KRX also issued a five-minute sell-side sidecar immediately after the opening bell, temporarily halting program-driven sell orders in KOSPI futures. A similar sidecar was also activated on the tech-heavy KOSDAQ market.
The United States and Israel carried out coordinated strikes on Iran over the weekend, killing Iran's Supreme Leader Ayatollah Ali Khamenei. U.S. President Donald Trump signaled the possibility of a prolonged military campaign.
Overnight, the Dow Jones Industrial Average fell 0.83 percent, while the tech-heavy Nasdaq composite lost 1.02 percent.
Foreigners sold a net 1.17 trillion won (US$792 million) worth of stocks, offsetting institutions and individuals' stock purchases of 461.33 billion won and 638.82 billion won, respectively.
In Seoul, most large-cap shares traded sharply lower.
Market bellwether Samsung Electronics plunged 7.28 percent, and its chipmaking rival SK hynix fell 5.43 percent.
Top carmaker Hyundai Motor declined 10.92 percent, and its smaller affiliate Kia dropped 10.42 percent.
Defence giant Hanwha Aerospace fell 11.03 percent, and leading refiner SK Innovation dropped 12.83 percent.
Flag carrier Korean Air shed 5.75 percent, and leading shipping firm HMM tumbled 16.73 percent.
Among gainers, defence firm LIG Nex1 rose 3.63 percent and refiner S-Oil jumped 18.05 percent.
The Korean won was trading at 1,477.15 won against the U.S. dollar as of 11:45 a.m., down 11.05 won from the previous session.
— IANS
Reader Comments
Seeing foreign investors pulling out 1.17 trillion won is alarming. The same flight to safety could happen here, putting pressure on the rupee. Hope our RBI is prepared to manage volatility. 📉
While the situation is serious, the article focuses heavily on the negatives. It briefly mentions defence stocks like LIG Nex1 gaining. In times of conflict, certain sectors often see a boost. The analysis could be more balanced.
An 8% drop is massive. It shows how fragile investor confidence is. For Indian markets, the key will be oil prices. If crude spikes due to this, it will be a double whammy for our economy – impacting both inflation and the trade deficit.
Hyundai down 10%! That's a big hit. They have a significant presence in India too. This geopolitical tension is bad news for everyone. Hope cooler heads prevail soon. The world can't afford another prolonged war.
The trigger was the strike killing Iran's Supreme Leader. Such a decisive action was bound to cause massive uncertainty. Markets hate uncertainty more than anything else. Time to review my portfolio and maybe increase exposure to gold or bonds.
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