(LEAD) Seoul shares open sharply lower on tech losses amid Middle East tensions

Lead

Seoul shares plummeted Thursday, led by steep losses in technology heavyweights, as escalating tensions in the Middle East weighed on investor sentiment, according to Yonhap News. The benchmark Korea Composite Stock Price Index (KOSPI) closed at 6,820.60, down 463.81 points, or 6.37 percent from the previous session, after opening 4.45 percent lower and falling as low as 6,730.87 during the day.

The Korea Exchange, the country's bourse operator, activated a sell-side sidecar on the KOSPI for 20 minutes at around 9:10 a.m. after the benchmark index fell more than 5 percent. The decline came a day after the index surged 6.24 percent as softer-than-expected U.S. inflation data eased concerns about near-term Federal Reserve interest rate hikes.

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Yonhap News reported that the U.S. launched fresh strikes on Iran on Wednesday (U.S. time), escalating tensions in the Middle East and renewing concerns over potential disruptions to regional energy supplies. The escalating conflict revived investor worries about energy supplies from the region.

Overnight, the Dow Jones Industrial Average rose 0.29 percent to 52,658.64, while the tech-heavy Nasdaq Composite declined 0.62 percent to 26,269.23, according to the reports. Concerns over artificial intelligence (AI) reemerged, sending major AI-related tech stocks on Wall Street lower. This weakness spilled over into Seoul's tech sector.

Adding to investor jitters, the Bank of Korea (BOK) raised its benchmark interest rate by a quarter percentage point to 2.75 percent earlier in the day, the first increase in 3 1/2 years, to curb inflation amid escalating tensions in the Middle East.

The Korean won rose against the U.S. dollar during Thursday's session, with Yonhap reporting it trading at 1,485.75 won per dollar as of 9:15 a.m., up 1.25 won from the previous session.

Key Claims

• The KOSPI closed 6.37 percent lower on July 16, at 6,820.60, after falling as low as 6,730.87, as reported by Yonhap News.
• The Korea Exchange activated a sell-side sidecar for 20 minutes after the KOSPI fell more than 5 percent.
• Technology stocks led the decline, with Samsung Electronics plunging 8.77 percent to 255,000 won and SK hynix tumbling 11.53 percent to 1,842,000 won, as reported by Yonhap News.
• The Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75 percent, the first increase in 3 1/2 years.
• The U.S. launched fresh strikes on Iran on Wednesday, escalating tensions in the Middle East.
• Institutional investors sold a net 2.37 trillion won (US$1.6 billion) and foreign investors sold 1.38 trillion won worth of shares, while retail investors bought a net 3.66 trillion won.
• "Profit-taking followed sharp gains in technology stocks a session earlier, while persistent concerns over the semiconductor industry kept the index under pressure," Kang Jin-hyeok, an analyst at Shinhan Securities Co., was quoted as saying by Yonhap News.