Seoul stocks experienced a significant downturn, plummeting over 4% on Tuesday due to heavy foreign selling pressure. Renewed threats from US President Donald Trump against Iran, amidst the ongoing Middle East conflict, further dampened investor sentiment. The Korean won also weakened sharply against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) declined by 224.84 points, or 4.26%, to reach 5,052.46. This marks the fourth consecutive session of losses for the index.
Risk aversion intensified as the conflict, which began in late February following US-Israeli strikes on Iran, showed indications of further escalation.
On Monday (US time), President Trump issued a stark warning, threatening to “completely obliterate” Iran’s Kharg Island, a crucial oil hub, as well as its power plants and oil wells, if a peace agreement with the United States is not reached “shortly.”
Tehran, however, rejected the peace proposals, deeming them “unrealistic, illogical and excessive.” Simultaneously, a parliamentary security committee reportedly approved a draft bill to introduce a toll system for the Strait of Hormuz, according to international media outlets.
Israeli Prime Minister Benjamin Netanyahu stated that the war had achieved more than half of its objectives, although he did not provide a specific timeline for its conclusion.
The involvement of Iran-backed Houthi militants in Yemen over the weekend exacerbated concerns about potential disruptions to global oil supplies, further contributing to market instability.
