Seoul stocks plummet nearly 6 pc amid escalating Mideast tensions
Seoul, July 24
Seoul stocks snapped their three-day winning streak to plummet nearly 6 per cent on Friday, as escalating tensions in the Middle East sapped risk appetite. The local currency rose against the greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 406.27 points, or 5.72 percent, to 6,690.62 after falling as low as 6,650.41.
The sharp decline triggered the country's bourse operator to suspend program trading for five minutes in early trading, reports Yonhap news agency.
Trade volume was moderate at 395.1 million shares worth 30.9 trillion won (US$21.1 billion). Losers outnumbered winners 582 to 301.
Foreigners and institutional investors were net sellers, offloading a combined net 5.2 trillion won. Retail investors snatched up 5.18 trillion won.
"Risk appetite retreated amid escalating tensions in the Middle East. The brakes have failed and the local stock market is continuing volatile trading," said Lee Kyoung-min, an analyst from Daishin Securities.
U.S. President Donald Trump threatened to launch a "massive attack" on Iran that could be "bigger than ever before," as tensions continued to escalate with Tehran.
Further pressure was added to the local stock market amid concerns that the semiconductor super cycle may have passed its peak, following a bearish outlook on the chip sector from Morgan Stanley, the analyst added.
Most market heavyweights closed sharply lower, while bio and consumer products gathered ground.
Top-cap Samsung Electronics tumbled 7.59 percent to 249,500 won, while its industry rival SK hynix dipped 8.34 percent to 1,759,000 won.
Carmaker Hyundai Motor slid 7.18 percent to 401,000 won, financial firm KB financial inched down 2.72 percent to 171,500 won, and shipbuilder HD Hyundai Heavy Industries retreated 2.51 percent to 485,500 won.
In contrast, bio firms ended in positive territory as robust earnings from industry leader Samsung Biologics fuelled optimism for the entire sector.
Samsung Biologics rose 10.08 percent to 1,518,000 won, and Celltrion advanced 3.14 percent to 177,600 won.
The Korean won was quoted at 1,466.6 won against the U.S. dollar as of 3:30 p.m., up 0.2 won from the previous session.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4.2 basis points to 3.959 percent, while the return on the benchmark five-year government bonds added 5 basis points at 4.214 percent.
— IANS
Reader Comments
This is a classic case of geopolitics driving market panic. The semiconductor cycle concerns add another layer of uncertainty. For Indian investors, it's a time to diversify.
What goes up must come down, but 6% is brutal. 😓 Hope our Sensex and Nifty don't catch the same cold tomorrow. Time to review portfolio allocations.
It's interesting to see retail investors buying the dip while institutions sell. Shows the classic divide between long-term faith and short-term fear. I'd be cautious though.
These wild swings are worrying. It's not just Korea—this Mideast tension is a global risk. India should be ready with contingency plans for any oil price shocks.
Respectfully, I think the panic is overblown. Market corrections are normal. But the semiconductor slowdown comment is valid—we should watch how that impacts India's IT sector.
Trump threatening "massive attack" on Iran—this kind of rhetoric alone can crash markets. Hopefully diplomacy prevails. Meanwhile, Indian investors should focus on domestic stories.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.