South Korean stocks experienced a decline on Tuesday morning, primarily due to significant foreign sell-offs. The Korea Composite Stock Price Index (KOSPI) dropped by 1.69 percent to 5,188.16, reflecting concerns over global oil supplies and broader economic implications. The index initially opened 3 percent lower but later recovered partially from its early losses.
The escalating conflict in the Middle East, triggered by US President Donald Trump’s threats towards Iran’s Kharg Island and oil facilities, has intensified worries about global oil availability. Iran has dismissed peace proposals as unrealistic, leading to further tensions. Additionally, there are reports of a draft bill in Iran proposing a toll system for the Strait of Hormuz.
The global oil prices surged as a result of the escalating conflict, with US West Texas Intermediate (WTI) crude futures for May delivery exceeding $100 per barrel for the first time since July 2022. This increase in oil prices has impacted various sectors, with major companies like Samsung Electronics, SK hynix, Hyundai Motor, and LG Energy Solution experiencing declines in their stock values.
Amidst the market fluctuations, some sectors witnessed mixed trading patterns. While bio giant Samsung Biologics saw a rise in its shares, other companies like Celltrion remained stable. Notably, companies in the energy and shipbuilding sectors, such as Doosan Enerbility and Hanwha Ocean, observed positive growth in their stock values. The local currency, trading at 1,525.2 won against the US dollar, also experienced a slight decline.
