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Seoul shares nose-dived 9 percent on Monday as investors offloaded technology stocks, driven by profit-taking and renewed tensions in the Middle East. The Korean won also weakened against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 669.01 points, or 8.95 percent, to close at 6,806.93, after touching a low of 6,783.43.

Coverage Comparison

Yonhap News, South Korea's leading wire service, reported that the market opened 0.85 percent lower and then extended losses, triggering a circuit breaker that halted trading of KOSPI-listed stocks for 20 minutes. This was the seventh activation of the measure this year, according to Yonhap.

Key Claims

  • The KOSPI dropped 8.95 percent to 6,806.93, with decliners far outnumbering gainers 713 to 179.
  • Trade volume was moderate at 469.86 million shares worth 39.8 trillion won (US$26.5 billion).
  • Institutional investors and foreigners sold a net 2.22 trillion won and 1.7 trillion won worth of shares, respectively, while individuals bought a net 3.9 trillion won.
  • The circuit breaker was triggered for the seventh time this year, halting trading for 20 minutes.
  • SK hynix's American depositary receipts (ADRs) closed at US$168 each on the Nasdaq, above the offering price of $149.
  • The yield on three-year Treasurys rose 4.1 basis points to 3.809 percent.
Tech stocks led the decline. Market bellwether Samsung Electronics plunged 10.7 percent to 254,500 won, while chipmaking rival SK hynix also suffered steep losses, Yonhap reported.

The sell-off came despite a strong U.S. market debut for SK hynix's share offering. On Friday, U.S. stocks advanced, with the Dow Jones Industrial Average and the Nasdaq Composite both gaining 0.29 percent. SK hynix's ADRs closed at US$168, well above the offering price of $149. However, analysts said investors took profits on SK hynix shares and shifted to the ADRs.

Investor sentiment was further dampened by heightened uncertainty in the Middle East after the United States and Iran exchanged fresh strikes over the status of the Strait of Hormuz, according to Yonhap.

Samsung Securities attributed part of the volatility to newly introduced single-stock leveraged exchange-traded funds linked to Samsung Electronics and SK hynix, saying in a research note that these funds "continued to fuel volatility in the stock market."