South Korean stocks plunged by over 3% on Thursday morning following US President Donald Trump’s warning of striking Iran “extremely hard” in the coming weeks. The benchmark Korea Composite Stock Price Index (KOSPI) fell 197.1 points, or 3.6%, to 5,281.6 by 11:20 a.m. The index initially rose over 1% in line with Wall Street gains but reversed course after Trump’s remarks dashed hopes for a quick resolution to the ongoing conflict.
The escalation in tensions came after Trump’s statement in a televised address, where he emphasized hitting Iran hard over the next two to three weeks and threatening to bring the country back to the Stone Age. This warning led to a surge in global oil prices, with Brent crude surging over 4% to surpass $100 a barrel. The conflict, stemming from US-Israeli strikes on Iran since late February, has disrupted oil supply chains, causing global oil prices to soar and unsettling financial markets.
In response to the heightened geopolitical risks, major South Korean companies witnessed declines in their stock values. Samsung Electronics, a key market player, saw a 5.17% drop, while SK hynix, a leading chip manufacturer, experienced a 5.15% decrease. Hyundai Motor, the top automaker, recorded a 4.3% decline, with its affiliate Kia also losing 2.06% in stock value. Other notable companies like LG Energy Solution, SK Square, and Doosan Enerbility registered varying degrees of decline in their stock prices.
The downward trend extended to the financial sector, with KB Financial and POSCO, a major steelmaker, witnessing drops of 1.35% and 1.01%, respectively. Additionally, shipbuilders like Hyundai Heavy and Hanwha Ocean faced declines of 2.21% and 4.49%, respectively. In the biotech sector, Samsung Biologics saw a 1.34% increase, while Celltrion recorded a 3.83% decrease in stock value. However, Hanwha Aerospace, a defense company, and Samsung SDI managed to buck the trend by posting gains of 6.3% and 2.2%, respectively.
The local currency, the won, was trading at 1,520.2 against the US dollar at 11:20 a.m., marking a decline of 18.9 won from the previous session.
