South Korean Markets Crash 12%, Worst Drop Since 9/11 After Iran Strikes

The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 698.37 points, or 12.06 per cent, to close at 5,093.54, extending losses from a 7.24 per cent drop in the previous session, reports Yonhap news agency.

The 12.06 per cent fall marked the steepest one-day decline since Sept. 12, 2001, in the aftermath of the Sept. 11 terrorist attacks in the United States.

Trade volume was heavy at 1.6 billion shares worth 62.6 trillion won ($42.5 billion). Losers sharply outnumbered winners 908 to 12.

The Korea Exchange (KRX) triggered circuit breakers shortly after the KOSPI fell more than 8 per cent amid heightened geopolitical tensions.

Earlier in the session, the KRX activated 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 issued on the tech-heavy KOSDAQ market.

The US 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 per cent, while the tech-heavy Nasdaq composite lost 1.02 per cent.

Institutions sold a net 579.4 billion won worth of stocks, offsetting foreigners and individuals' stock purchases of 228.78 billion won and 72.9 billion won, respectively.

"Institutional investors remained net sellers for a second straight session amid escalating Middle East tensions, dragging the index below the 6,000-point mark," Kang Jin-hyeok, an analyst at Shinhan Securities Co., said.

In Seoul, most large-cap shares closed sharply lower.

Market bellwether Samsung Electronics plunged 11.74 per cent to 172,200 won, and its chipmaking rival SK hynix fell 9.58 per cent to 849,000 won.

Top carmaker Hyundai Motor declined 15.8 per cent to 501,000 won, and its smaller affiliate Kia dropped 14.04 per cent to 156,700 won.

Defence giant Hanwha Aerospace fell 7.61 per cent to 1,323,000 won, and leading refiner SK Innovation dropped 16.73 per cent to 109,000 won.

Flag carrier Korean Air shed 7.94 per cent to 23,200 won, and leading shipping firm HMM tumbled 16.33 per cent to 20,500 won.

The Korean won was quoted at 1,476.20 won against the US dollar at 3:30 p.m., down 10.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4.3 basis points to 3.223 percent, and the return on the benchmark five-year government bonds climbed 5.3 basis points to 3.477 per cent.

- IANS