South Korean stock markets experienced a significant downturn on Monday, with the benchmark index opening sharply lower. This decline triggered a sell-side sidecar for the second straight session, reflecting growing investor anxieties. The downturn followed last week’s declines on Wall Street, fueled by persistent inflation concerns stemming from the volatile geopolitical situation in the Middle East.
The Korea Composite Stock Price Index (KOSPI), the nation’s benchmark, initially opened 0.67 percent lower. However, market losses deepened rapidly, with the index shedding 317.8 points, or 4.24 percent, to reach 7,175.38 by 9:15 a.m. KST.
At its lowest point during early trading, the KOSPI index plunged to 7,142.71, representing a decline of more than 5 percent.
The sharp market movements led to a five-minute suspension of program trading for the KOSPI at approximately 9:19 a.m. This circuit breaker mechanism is activated by the country’s bourse operator when KOSPI 200 futures experience a rise or fall exceeding 5 percent.
The previous Friday saw US stock markets also retreat from recent record highs. Investor concerns were driven by persistent anxieties over rising global oil prices, exacerbated by ongoing geopolitical tensions in the Middle East.
Specifically, the Dow Jones Industrial Average recorded a drop of 1.07 percent, the S&P 500 declined by 1.24 percent, and the tech-heavy Nasdaq composite index shed 1.54 percent.
Back in Seoul, technology shares were particularly affected, experiencing widespread profit-taking after their recent rally. Foreign investors were notably at the forefront of this selling spree in the South Korean market.
Among key tech giants, top-cap Samsung Electronics saw its stock price fall by 1.76 percent, while its major chipmaking rival, SK hynix, decreased by 1.7 percent.
Leading battery manufacturer LG Energy Solution also recorded a decline of 1.63 percent.
The automotive sector also faced losses, with industry giant Hyundai Motor experiencing a 1.27 percent drop, and its affiliate Kia shedding a more substantial 4.78 percent.
Conversely, defense sector giant Hanwha Aerospace bucked the trend, registering a gain of 0.86 percent.
