South Korean stocks experienced a sharp decline on Monday, marking the first trading day since talks between Washington and Tehran concluded without resolution. This market reaction intensified following US President Donald Trump’s announcement of a blockade of the crucial Strait of Hormuz.
The benchmark Korea Composite Stock Price Index (KOSPI) initially opened 2.08 percent lower. While it managed to narrow some losses, the index still registered a fall of 89.15 points, or 1.52 percent, settling at 5,769.72 within the first 15 minutes of trading.
The market instability follows weekend negotiations between the United States and Iran in Pakistan, which unfortunately ended without a diplomatic agreement.
Subsequent to the breakdown in discussions, President Trump took to social media to declare that the U.S. Navy would impose a blockade on the strategically vital Strait of Hormuz. The U.S. military confirmed this measure would take effect at 10 a.m. on Monday, significantly escalating regional tensions.
This new development places the previously announced two-week ceasefire between the U.S. and Iran, established on April 7, in considerable jeopardy.
In Seoul, most large-capitalization shares faced significant selling pressure from foreign investors, leading to widespread losses across the market.
Market bellwether Samsung Electronics saw its shares slide by 2.91 percent, while leading chip manufacturer SK hynix recorded a 1.36 percent decline.
Top automaker Hyundai Motor’s stock dropped 2.15 percent, and its affiliate Kia also experienced a 1.21 percent loss.
Shares of prominent battery maker LG Energy Solution decreased by 0.61 percent, alongside a 0.69 percent retreat for major banking conglomerate KB Financial Group.
In contrast to the broader market downturn, defense sector shares demonstrated resilience. Industry leader Hanwha Aerospace added 0.46 percent, and LIG Nex1 experienced a notable rise of 1.63 percent.
