Key facts
- Seoul stocks tumbled 4 percent on Wednesday due to renewed U.S.-Iran hostilities.
- The KOSPI closed down 3.99 percent at 6,562.72.
- Rising oil prices and inflation worries negatively impacted investor sentiment.
- Major U.S. stock indexes also finished lower overnight.
- The Korean won strengthened against the U.S. dollar.
Seoul stocks tumbled 4 percent on Wednesday, with the benchmark Korea Composite Stock Price Index (KOSPI) closing down 273.08 points, or 3.99 percent, at 6,562.72. This decline ended a two-session winning streak and was driven by renewed hostility between the United States and Iran, which pushed up crude prices and fueled inflation worries.
Overnight, the U.S. launched new airstrikes against Iranian targets around the Strait of Hormuz, leading to higher oil prices and reigniting inflation concerns. This geopolitical development contributed to a decline in major U.S. stock indexes, with the benchmark 10-year U.S. Treasury yield reaching its highest point since January of the previous year.
Trading volume was light, with 321.2 million shares worth 18.6 trillion won (US$13.6 billion) changing hands. Losers significantly outnumbered winners, with 734 stocks declining compared to 137 advancing. Foreign and institutional investors were net sellers, offloading shares worth 1.9 trillion won and 2 trillion won, respectively, while individual investors were net buyers, purchasing 2.3 trillion won worth of stock.
Analysts attributed the bearish market sentiment to rising oil prices and increasing sovereign debt yields in major economies. Key South Korean companies experienced significant drops: market bellwether Samsung Electronics fell 4.02 percent, SK hynix tumbled 4.73 percent, top carmaker Hyundai Motor sank 5.62 percent, and its affiliate Kia slumped 5.18 percent. Battery makers also saw declines, with LG Energy Solution decreasing 5.31 percent and POSCO Future M plunging 8 percent. Internet giants Naver and Kakao also dipped 2.79 percent and 3.84 percent, respectively.
Despite the stock market downturn, the Korean won strengthened against the U.S. dollar, trading at 1,368.7 won per dollar, up 1.7 won from the previous session.