Seoul shares down over 3 pct late Wed. morning amid U.S.-Iran tensions, tech losses

Lead

South Korean stocks were trading more than 3 percent lower late Wednesday morning, as escalating tensions between the United States and Iran and sharp losses in technology shares weighed on the market. The benchmark Korea Composite Stock Price Index (KOSPI) fell 286.99 points, or 3.54 percent, to 7,809.94 as of 11:20 a.m., extending losses from an opening decline of 2.43 percent, Yonhap News Agency reported.

The sell-off came after reports that the United States struck Iran in response to the shooting down of an American Apache helicopter in the Strait of Hormuz, and Iran hit back, Yonhap said. Market sentiment was also dampened by doubts over the valuation of artificial intelligence (AI) stocks, which resurfaced after news that data center developer Crusoe Energy Systems suspended one of its projects at the request of an unidentified big tech customer.

Coverage Comparison

Coverage of the market decline varied across outlets and reporting times. Al Jazeera reported a steeper drop, stating that South Korea's main index plunged nearly 9 percent in early morning trading on a day when stocks in Japan, Taiwan, and Hong Kong also saw sharp falls. The outlet noted that the KOSPI's decline triggered the exchange's circuit breaker for the second time this year, with the index closing 8.29 percent lower.

Multiple Yonhap News Agency reports on the same day provided a more moderate figure, placing the KOSPI's decline at more than 3 percent by late morning, with the index closing 4.52 percent lower after falling as much as 366.11 points. These reports attributed the decline to U.S.-Iran tensions and a tech slump, without mentioning a circuit breaker activation.

The discrepancy in the magnitude of the drop may reflect differences in the time of reporting: Al Jazeera's account focused on the initial plunge and its aftermath, while Yonhap's reports tracked the index's movements throughout the day. Al Jazeera also emphasized the resumption of conflict between Israel and Iran and growing expectations of U.S. interest rate hikes, while Yonhap's reports centered on U.S.-Iran tensions and AI stock valuation concerns.

Key Claims

The most widely reported trigger for the market decline was escalating tensions between the United States and Iran. Yonhap News Agency reported that the U.S. launched new strikes on Iran in response to the shooting down of an American Apache helicopter in the Strait of Hormuz, and that Iran subsequently hit back. Al Jazeera similarly cited the resumption of conflict between Israel and Iran as a driver, though this framing differs from Yonhap's focus on the U.S.-Iran confrontation.

Technology shares were a key source of losses. Yonhap reported sharp losses in technology shares, driven by concerns over the high valuation of AI stocks. The tech-heavy Nasdaq composite closed 0.97 percent lower, with major tech names such as Broadcom, Apple, Micron, and Nvidia all declining. Al Jazeera also attributed the sell-off to investors unloading high-priced tech equities linked to AI, noting that the decline was part of a region-wide sell-off following Wall Street's lead.

Additional factors mentioned in some reports include growing expectations of U.S. interest rate hikes, which Al Jazeera cited as a contributing factor, and overnight tech losses on Wall Street, which Yonhap noted in its opening reports. Yonhap also reported that foreign investors were unloading local shares, extending a selling streak, though this was noted in coverage from an earlier date.

A single Yonhap report mentioned that U.S.-Iran peace talks were progressing, leading to a slight opening dip rather than a sharp decline, but this was an outlier compared to the majority of reports describing renewed tensions.