Key facts
- The KOSPI closed down 3.65% at 6,384.24 on Monday.
- Tech stocks led the decline, with Samsung Electronics falling 4.39% and SK hynix down 4.52%.
- Concerns over semiconductor ETF rebalancing and treasury stock purchases contributed to the sell-off.
- Escalating Middle East tensions and renewed Houthi attacks on Saudi Arabia's airport fueled oil price rises.
- Institutions and foreigners were net sellers of South Korean stocks.
- The Korean won rose against the U.S. dollar.
Seoul shares plunged more than 3 percent on Monday, marking the fourth consecutive session of losses. The benchmark Korea Composite Stock Price Index (KOSPI) closed down 3.65%, or 241.69 points, at 6,384.24. The decline was primarily driven by a significant sell-off in technology stocks, exacerbated by concerns over inflation and rising oil prices due to escalating Middle East tensions.
Analysts pointed to the rebalancing of semiconductor-focused exchange-traded funds (ETFs) and speculation that major chipmakers Samsung Electronics and SK hynix may have concluded their treasury stock purchases as key factors behind the tech sell-off. Samsung Electronics shares fell 4.39% to 250,500 won, while SK hynix declined 4.52% to 1.6 million won.
Broader market sentiment was also affected by renewed Houthi attacks on Saudi Arabia's main airport, which raised concerns about potential disruptions to energy supplies and further inflationary pressures. This complicates efforts by the Federal Reserve to control inflation.
Trade volume was moderate, with 313 million shares traded worth 21.33 trillion won. Decliners significantly outnumbered advancers, with institutions and foreign investors being net sellers of South Korean equities. Conversely, individual investors were net buyers.
Other notable stock movements included defense giant Hanwha Aerospace dropping 3.25% and top carmaker Hyundai Motor shedding 1.39%. On the upside, shipping firm HMM rose 4.81% and tobacco company KT&G climbed 1.58%.
The Korean won strengthened against the U.S. dollar, trading at 1,335.1 won per dollar as of 3:30 p.m., compared to 1,342.8 won at the previous session's close.