• KOSPI fell 6.37% on Thursday, closing at 6,820.60, down 463.81 points from the previous session.
  • Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75%, the first increase in 3½ years, citing inflation pressures tied to escalating Middle East tensions.
  • U.S. strikes on Iran escalated Middle East tensions, renewing investor concern over potential disruptions to regional energy supplies.
  • Samsung Electronics fell 8.77% and SK hynix tumbled 11.53%, leading the technology sector decline.
  • Institutional and foreign investors sold a net 2.37 trillion won and 1.38 trillion won worth of shares, respectively, while retail investors bought a net 3.66 trillion won.

Seoul market reverses Wednesday’s 6.24% surge on profit-taking

The Korea Composite Stock Price Index opened 4.45% lower on Thursday and extended its losses throughout the session, falling as low as 6,730.87 before closing at 6,820.60, down 463.81 points, or 6.37%, from the previous session. The Korea Exchange 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%.

The sell-off reversed much of the prior session’s gains. The KOSPI had surged 6.24% on Wednesday after softer-than-expected U.S. inflation data eased concerns about near-term Federal Reserve interest rate hikes.

The Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75% earlier in the day, marking the first increase in 3½ years. The central bank cited the need to curb inflation amid escalating tensions in the Middle East.

The U.S. launched fresh strikes on Iran, escalating tensions in the region and renewing concerns over potential disruptions to regional energy supplies.

Kang Jin-hyeok, an analyst at Shinhan Securities Co., said profit-taking followed sharp gains in technology stocks a session earlier, while persistent concerns over the semiconductor industry kept the index under pressure.

Institutional and foreign investors sold a net 2.37 trillion won (US$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% to 255,000 won, while rival chipmaker SK hynix tumbled 11.53% to 1,842,000 won. Top automaker Hyundai Motor fell 2.07% to 425,000 won, and steelmaker POSCO Holdings slipped 0.95% to 311,500 won.

Among gainers, shipbuilder Hanwha Ocean rose 5.73% to 86,700 won, while beverage firm Hitejinro gained 2.47% to 14,910 won.

The Korean won was quoted at 1,480.4 won against the U.S. dollar at 3:30 p.m., up from 1,484.7 won the previous session.