Seoul Stocks Open Sharply Lower Amid Middle East Tensions and Profit-Taking
SEOUL — Seoul stocks opened sharply lower on Friday, with the benchmark KOSPI dropping as much as 4.87 percent in late morning trading, as investors reacted to escalating tensions between the United States and Iran. The decline extended into Monday, when the index opened sharply lower as investors locked in profits after a record-breaking surge the previous session.
On Friday, the KOSPI opened 96.11 points, or 1.35 percent, lower at 7,000.78, according to Yonhap. By 9:15 a.m., the index had widened its loss to 191.3 points, or 2.7 percent, reaching 6,905.59. By 11:36 a.m., the decline deepened further, with the index falling 345.3 points, or 4.87 percent, to 6,751.56, triggering a temporary halt in program trading for KOSPI-listed stocks at 11:28 a.m.
The sell-off was driven by concerns over the Middle East conflict. U.S. President Donald Trump said in an interview with a media outlet that he is considering a "massive attack" against Iran on a scale larger than strikes witnessed earlier, Yonhap reported. The threat heightened anxiety over the ongoing war between Washington and Tehran. Yemen Houthi fighters claimed they attacked ships in the Red Sea, further escalating the already volatile situation and pushing Brent crude futures above US$100 per barrel.
Overnight, U.S. stocks slipped as the war in the Middle East showed little signs of ending. The S&P 500 fell 1.21 percent, and the tech-heavy Nasdaq dipped 2.15 percent.
Most market heavyweights were trading lower on Friday. Samsung Electronics dipped 6.39 percent, while SK hynix shed 6.2 percent. Hyundai Motor sank 8.45 percent, and KB Financial fell 5.22 percent. Defense giant Hanwha Aerospace added 3.34 percent. The Korean won was trading at 1,463.4 won against the U.S. dollar, up 10.8 won from the previous session.
The decline continued into Monday, with the KOSPI opening 237.18 points, or 3.6 percent, lower at 6,358.27, before extending losses to 280.05 points, or 4.25 percent, to 6,315.4 as of 9:15 a.m., according to Yonhap. Investors were cashing in gains after the index vaulted around 17 percent on Friday, the sharpest single-day gain on record, according to Han Ji-young, an analyst from Kiwoom Securities.
The Monday decline bucked a rally on Wall Street on Friday, where robust earnings from Amazon fueled investor optimism for the artificial intelligence (AI) sector. Revenue at Amazon's cloud computing unit jumped 37 percent in the second quarter ending in June, exceeding market expectations.
Additionally, tensions in the Middle East showed signs of easing as Trump said talks with Iran will resume Monday after he called off a "massive attack" on the country, Yonhap reported.
On Monday, most large-cap shares were trading lower. Samsung Electronics fell 6.48 percent, while SK hynix dipped 6.69 percent. LG Energy Solution fell 4.27 percent, and KB Financial inched down 0.47 percent, while Hanwha Aerospace added 0.55 percent. The Korean won was quoted at 1,433.3 won against the U.S. dollar, up 2.2 won from the previous session.