South Korean equities commenced trading lower on Thursday, reflecting persistent investor skepticism regarding the uncertain progress of a proposed ceasefire agreement between the US and Iran. Divergent interpretations of the deal’s terms fueled broader geopolitical uncertainty, impacting market sentiment.
The benchmark Korea Composite Stock Price Index (KOSPI) registered a decline of 50.72 points, or 0.86 percent, settling at 5,821.62 by 9:15 a.m. local time.
This downturn follows a significant surge on Wednesday, when the KOSPI climbed nearly 7 percent. That rally was sparked by initial reports of a two-week ceasefire agreement between Washington and Tehran, which concurrently led to a sharp decrease in global crude oil prices.
However, overnight developments saw a re-escalation of Middle East tensions. Israel declared its intent to continue military operations against Lebanon, asserting that Lebanon falls outside the scope of the recently announced ceasefire agreement, exacerbating investor anxieties.
Further complicating matters, Iran indicated a potential withdrawal from the ceasefire accord, including its crucial commitment to maintain open passage through the Strait of Hormuz. This statement cited Israel’s continued actions in Lebanon as justification.
Washington’s acknowledgement that Israel’s operations against Lebanon are not covered by the ceasefire pact only deepened the prevailing uncertainties surrounding the regional crisis, directly impacting market sentiment.
The ongoing dispute over agreement terms also fueled investor concerns about the effective closure of the Strait of Hormuz, a vital global shipping lane, threatening oil supply routes.
Among leading market capitalization stocks, technology giants experienced declines. Samsung Electronics, a key bellwether, fell by 2.38 percent, while semiconductor peer SK hynix saw a 1.84 percent drop.
The construction sector, which had enjoyed significant gains in the prior session, reversed course. Hyundai Engineering & Construction declined by 4.03 percent, and Daewoo Engineering & Construction finished 0.89 percent lower.
In the energy sector, leading oil refiner SK Innovation shed 0.33 percent, contrasting with S-Oil which posted a modest gain of 0.27 percent.
Conversely, battery manufacturers showed resilience. LG Energy Solution climbed 0.99 percent, and Samsung SDI advanced by 1.17 percent.
