Kospi drops over 6% on tech losses due to Middle East tensions
Adding to investor jitters, the Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75 percent earlier in the day, the first increase in three and a half years.
A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 6,820.60 points on July 16, down 463.81 points, or 6.37 percent, from the previous trading session.
YONHAP
Shares plummeted again on Thursday, led by steep losses in technology heavyweights, as escalating tensions in the Middle East weighed on investor sentiment. The won rose against the dollar.
After opening 4.45 percent lower, the Kospi extended its losses to close at 6,820.60 — down 463.81 points, or 6.37 percent, from the previous session — after falling as low as 6,730.87.
The Korea Exchange, the country’s bourse operator, activated a sell-side trading curb, known locally as a sidecar, on the Kospi for 20 minutes at around 9:10 a.m. after the benchmark index fell more than 5 percent.
A sidecar halts program trading when certain market indexes fluctuate beyond a designated threshold. The Korea Exchange activates a sell-side sidecar for the Kospi when the Kospi 200 futures price falls by 5 percent or more from the reference price and remains at that level for at least one minute.
The decline came after the index surged 6.24 percent on Wednesday as softer-than-expected U.S. inflation data eased concerns about near-term U.S. Federal Reserve interest rate hikes.
Adding to investor jitters, the Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75 percent earlier in the day, the first increase in three and a half years, to curb inflation due to escalating tensions in the Middle East.
The United States launched fresh strikes on Iran, escalating tensions in the Middle East and renewing concerns over potential disruptions to regional energy supplies.
“Profit-taking followed sharp gains in technology stocks a session earlier, and persistent concerns over the semiconductor industry kept the index under pressure,” Kang Jin-hyeok, an analyst at Shinhan Securities, said.
Institutional and foreign investors sold a net 2.37 trillion won ($1.6 billion) and 1.38 trillion won worth of shares, respectively, while retail investors bought a net 3.66 trillion won.
Technology stocks led the decline.
Market bellwether Samsung Electronics plunged 8.77 percent to 255,000 won, and rival chipmaker SK hynix tumbled 11.53 percent to 1.84 million won.
Top automaker Hyundai Motor fell 2.07 percent to 425,000 won, and steelmaker Posco Holdings slipped 0.95 percent to 311,500 won.
Among gainers, shipbuilder Hanwha Ocean rose 5.73 percent to 86,700 won, and leading beverage firm Hitejinro gained 2.47 percent to 14,910 won.
The won strengthened by 4.3 won from the previous session, trading at 1,480.4 won against the dollar at 3:30 p.m.
Yonhap
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
