South Korean stocks experienced a significant downturn late Thursday morning, with a drop exceeding 3 percent, following warnings from US President Donald Trump regarding potential “extremely hard” strikes against Iran in the coming weeks.
The Korea Composite Stock Price Index (KOSPI), a benchmark for the South Korean stock market, plummeted by 197.1 points, or 3.6 percent, reaching 5,281.6 as of 11:20 a.m. The decline was directly attributed to President Trump’s hawkish stance.
Initially, the index showed positive momentum, opening more than 1 percent higher, mirroring overnight gains on Wall Street. However, Trump’s statements quickly reversed the trend, dampening hopes for a quick resolution to the ongoing conflict that has persisted for over a month.
In a prime-time address, Trump stated that the US would “hit them extremely hard over the next two to three weeks” and threatened to “bring them back to the Stone Age,” also suggesting that Iranian energy facilities could be targeted if a deal is not reached. These remarks sent shockwaves through the market.
Trump’s warning also caused a surge in global oil prices, with Brent crude oil jumping more than 4 percent to above $100 a barrel, further destabilizing the economic outlook.
The conflict, which began in late February following US-Israeli strikes on Iran, has been a major catalyst in driving up global oil prices due to supply disruptions. This has, in turn, rattled financial markets worldwide, raising concerns about inflation and the potential for a broader economic slowdown.
In the Seoul stock market, most major capitalization shares (big-cap shares) experienced a downward trend.
Market leader Samsung Electronics saw a significant decrease of 5.17 percent, while chip manufacturing giant SK hynix similarly dropped 5.15 percent.
Leading automaker Hyundai Motor experienced a substantial fall of 4.3 percent, while its affiliate, Kia, also declined, losing 2.06 percent.
Major battery manufacturer LG Energy Solution decreased by 0.37 percent, and artificial intelligence investment firm SK Square experienced a sharp dive of 5.59 percent. Nuclear power plant builder Doosan Enerbility also saw a decrease of 4.72 percent.
Leading financial institution KB Financial shed 1.35 percent, and major steel producer Posco slid 1.01 percent.
Major shipbuilder HD Hyundai Heavy retreated 2.21 percent, and its rival Hanwha Ocean dived 4.49 percent.
Shares in the biotechnology sector showed mixed performance. Bio giant Samsung Biologics climbed 1.34 percent, while Celltrion fell 3.83 percent.
Among the gainers, defense industry leader Hanwha Aerospace jumped 6.3 percent, and Samsung SDI added 2.2 percent.
