Seoul stocks experienced a significant downturn on Monday, plummeting nearly 3% as escalating tensions surrounding Iran fueled concerns about global oil supplies and overall market instability. Heavy foreign selling contributed to the sharp decline. The Korean won also weakened against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) closed at 5,277.3, a decrease of 161.57 points or 2.97%. This marks the third consecutive session of losses for the index.
Trading volume was moderate, with 721.04 million shares changing hands, valued at 20.66 trillion won ($13.64 billion). Losers outnumbered winners by a wide margin, 749 to 154.
Foreign investors were net sellers, offloading 2.13 trillion won worth of shares. In contrast, institutional and retail investors engaged in net buying, purchasing 883.16 billion won and 897.35 billion won worth of shares, respectively.
The KOSPI initially opened nearly 5% lower on Monday but pared some of its losses due to buying activity from retail and institutional investors.
Risk aversion intensified as the conflict in the Middle East showed signs of further escalation. The Houthi rebels launched their first attacks on Israel since the conflict began in late February and warned of continued military operations until attacks on Iran cease.
The involvement of the Houthis introduces a new threat to global oil markets. Concerns are mounting that they may target vessels in the Red Sea, a vital route for global oil and liquefied natural gas (LNG) shipments, potentially leading to further supply disruptions.
While US President Donald Trump mentioned ongoing negotiations with Iran aimed at ending the war, Washington has also ordered the deployment of thousands of troops to the region.
Global oil prices have already seen a notable increase due to the effective closure of the Strait of Hormuz, which has disrupted global oil supplies. South Korea is heavily reliant on energy imports.
“The prolonged war is making it increasingly difficult for market participants to respond amid mixed messages and complicated developments,” noted Han Ji-young, an analyst at Kiwoom Securities. “While downside resilience in the market remains valid, investors should brace for heightened volatility.”
Losses were widespread across various sectors.
Market heavyweight Samsung Electronics fell by 1.89% to 176,300 won, while its rival in the chip manufacturing sector, SK hynix, experienced a steeper decline of 5.31% to 873,000 won.
Leading automaker Hyundai Motor saw its shares drop by 5.15% to 469,500 won, and its affiliate Kia tumbled by 2.76% to 151,500 won.
In the biotech sector, Samsung Biologics decreased by 4.73% to 1,535,000 won, while Celltrion declined by 2.18% to 201,500 won.
Defense industry player Hanwha Aerospace fell by 2.02% to 1,308,000 won, and nuclear power plant builder Doosan Enerbility sank by 3.98% to 94,200 won.
Leading shipbuilder HD Hyundai Heavy Industries lost 3.71% to 480,000 won, while its competitor Hanwha Ocean shed 4.06% to 118,200 won.
Major financial institution KB Financial Group saw its shares fall by 4.14% to 145,900 won.
However, battery manufacturer LG Energy Solution bucked the trend, jumping by 3.93% to 410,000 won.
