KOSPI falls 8.95% on tech losses as U.S. and Iran exchange strikes over Strait of Hormuz

Circuit breaker halts trading for seventh time this year

Seoul’s Korea Composite Stock Price Index fell 669.01 points, or 8.95 percent, to close at 6,806.93 on Monday, after sinking as low as 6,783.43 during the session. Trade volume reached 469.86 million shares worth 39.8 trillion won (US$26.5 billion), with decliners outnumbering gainers 713 to 179.

The index opened 0.85 percent lower and extended its losses, triggering a circuit breaker that temporarily halted trading of KOSPI-listed stocks for 20 minutes. The measure has been activated seven times this year, marking the seventh such halt.

Institutional investors sold a net 2.22 trillion won worth of shares, and foreign investors sold a net 1.7 trillion won, while individuals bought a net 3.9 trillion won.

Tech stocks led the decline. Samsung Electronics plunged 10.7 percent to 254,500 won, and its chipmaking rival SK hynix plummeted 15.37 percent to 1,845,000 won. The selloff came after SK hynix’s American depositary receipts made a successful debut on the Nasdaq on Friday, closing at US$168 each, above the offering price of $149. Analysts said investors took profits on SK hynix shares and shifted to the company’s ADRs.

Samsung Securities said in a research note that the country’s newly introduced single-stock leveraged exchange-traded funds linked to Samsung Electronics and SK hynix “continued to fuel volatility in the stock market.”

Other major stocks also fell. Top carmaker Hyundai Motor declined 2.95 percent to 444,000 won, and defense giant Hanwha Aerospace dropped 3.21 percent to 936,000 won. Among the few gainers, leading battery maker LG Energy Solution rose 0.77 percent, and leading refiner SK Innovation climbed 7.09 percent to 110,200 won.

The Korean won weakened, quoted at 1,503.4 won against the U.S. dollar at 3:30 p.m., down 2 won from the previous session. Bond prices closed lower, with the yield on three-year Treasurys rising 4.1 basis points to 3.809 percent and the return on benchmark five-year government bonds climbing 3.3 basis points to 4.041 percent.

Investor sentiment was 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.

On Friday, U.S. stocks advanced, buoyed by SK hynix’s multibillion-dollar U.S. share offering. The Dow Jones Industrial Average gained 0.29 percent, and the tech-heavy Nasdaq Composite also rose 0.29 percent.