South Korean equities experienced a downturn on Monday, as escalating geopolitical tensions surrounding the Strait of Hormuz weighed on investor sentiment. This followed a US announcement of a blockade after peace talks with Iran collapsed. Concurrently, the South Korean currency depreciated against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) concluded the trading day 50.25 points, or 0.86 percent, lower, settling at 5,808.62.
Trading activity was robust, with a substantial 1.07 trillion shares exchanged, totaling 21.1 trillion won ($14.2 billion) in value. Market breadth saw decliners outnumbering advancers, with 524 issues falling against 343 rising.
Despite opening sharply lower, the KOSPI managed to trim some of its losses later in the session, driven by retail investors seeking value in what they perceived as bargain opportunities.
Foreign and institutional investors were net sellers, offloading 456.4 billion won and 702.3 billion won worth of South Korean stocks, respectively. Their selling pressure was partially counterbalanced by a significant net purchase of 750.7 billion won from individual investors.
The market’s decline was largely attributed to an announcement by President Donald Trump on social media. He stated that the US would block ships from Iranian ports following the failure of peace negotiations between Washington and Tehran in Pakistan over the weekend. The US military confirmed that the blockade would commence at 10 a.m. Monday.
Lee Kyoung-min, a researcher at Daishin Securities, commented, “Trump’s announcement ignited concerns regarding a potential blockade of the Strait of Hormuz and the subsequent rise in global oil prices, significantly impacting investor confidence.”
He further added, “Foreign investors shifted to net sellers for the first time in five sessions, while individual investors expanded their net buying, providing crucial support for the index.”
The majority of shares across various sectors closed in negative territory.
Market heavyweight Samsung Electronics saw its shares fall 2.43 percent to 201,000 won, while leading automaker Hyundai Motor declined 2.25 percent to 478,500 won.
Top battery manufacturer LG Energy Solution dipped 2.55 percent to 401,500 won, and bio-pharmaceutical giant Samsung Biologics retreated 1.34 percent to 1.55 million won.
Major shipbuilder HD Hyundai Heavy Industries recorded a 2.53 percent drop to 463,000 won, and national flag carrier Korean Air fell 3.04 percent to 23,950 won.
In contrast, defense sector firms posted gains. Industry leader Hanwha Aerospace rose 1.53 percent to 1.53 million won, and LIG Nex1 advanced 1.95 percent to 939,000 won.
Food and cosmetics stocks also demonstrated strength. Samyang Foods, globally recognized for its Buldak ramyeon series, climbed 4.2 percent to 1.29 million won, while prominent cosmetics manufacturer Cosmax surged 6.64 percent to 199,100 won.
