Korea Composite Stock Index Falls on Regional Uncertainty

South Korean Stocks Slide as Middle East Tensions Trigger Foreign Selling, Oil Prices Surge​

KOSPI Falls Nearly 2 Percent Amid Global Uncertainty​

Seoul, March 31: South Korean equities traded lower on Tuesday morning as escalating tensions in the Middle East and rising crude oil prices weighed heavily on investor sentiment, triggering significant foreign selling.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 89.14 points, or 1.69 percent, to 5,188.16 as of 11:20 a.m. The index had opened nearly 3 percent lower and remained under sustained pressure, although it managed to recover part of its early losses during intraday trading.

Middle East Conflict Drives Oil Price Spike​

Investor concerns intensified after U.S. President Donald Trump warned of potential military action targeting Iran’s key oil infrastructure, including Kharg Island, power plants, and oil wells, if a peace agreement is not reached soon.

In response, Tehran rejected the proposals, calling them unrealistic and excessive. Additionally, Iran’s parliamentary security committee approved a draft bill proposing a toll system for the Strait of Hormuz, a critical global oil transit route.

These developments pushed global crude prices sharply higher. U.S. West Texas Intermediate (WTI) crude futures for May delivery rose 3.25 percent to $102.88 per barrel, crossing the $100 mark on a closing basis for the first time since July 2022.

Heavy Losses in Large-Cap Stocks​

Most large-cap stocks in South Korea declined amid the broader market weakness.

Samsung Electronics, a market bellwether, fell 2.1 percent, while chipmaker SK Hynix dropped 4.24 percent. In the automobile sector, Hyundai Motor lost 2.45 percent and Kia declined 2.51 percent.

Battery manufacturer LG Energy Solution slipped 1.83 percent, while SK Square fell sharply by 5.98 percent. Defence firm Hanwha Aerospace declined 4.59 percent, and KB Financial dropped 1.85 percent. Shipbuilder HD Hyundai Heavy Industries edged down 0.52 percent.

Mixed Performance in Select Sectors​

Bio stocks showed mixed movement, with Samsung Biologics rising 3.14 percent while Celltrion remained flat.

Among gainers, Doosan Enerbility advanced 1.27 percent, and Hanwha Ocean surged 5.08 percent.

Korean Won Weakens Against US Dollar​

The South Korean won weakened against the U.S. dollar, trading at 1,525.2 won as of 11:20 a.m., down 9.5 won from the previous session, reflecting heightened risk aversion in the currency market.

Market Outlook​

The decline in South Korean equities underscores the impact of geopolitical risks and rising energy prices on global financial markets, with investors closely monitoring further developments in the Middle East.