Korean Shares Fall 8% Following Volatility Triggered by Geopolitical Tensions

South Korean Stocks Plunge Nearly 8 Percent as KOSPI Trading Halted Amid Global Tensions​

KOSPI Slides Sharply After Circuit Breaker Triggered​

Seoul, March 9: South Korean stocks dropped sharply on Monday, with the benchmark Korea Composite Stock Price Index (KOSPI) falling nearly 8 percent in late morning trading after the Korea Exchange temporarily halted transactions due to extreme volatility.

The KOSPI declined by 445.88 points, or 7.98 percent, to 5,138.99 as of 11:20 a.m. local time. The steep fall came after trading resumed following a 20 minute suspension earlier in the session.

The Korea Exchange triggered a circuit breaker at 10:31 a.m. after the index plunged 452.8 points, or 8.11 percent, to 5,132.07. Under exchange rules, a circuit breaker is activated when the benchmark index drops 8 percent below the previous session’s level for at least one minute, leading to a temporary halt in trading.

Market Volatility Intensifies After Recent Global Developments​

The latest halt follows another circuit breaker issued last Wednesday when the KOSPI tumbled 12.06 percent in a single session. That drop marked the steepest one day decline since September 12, 2001, in the aftermath of the September 11 attacks in the United States.

Earlier on Monday, the exchange also activated a sell side sidecar, which suspended sell orders for five minutes. The mechanism is triggered when the KOSPI 200 Futures index moves by 5 percent or more for at least one minute.

Energy Prices and Weak US Jobs Data Weigh on Investor Sentiment​

Investors monitored global energy market volatility closely after the US benchmark West Texas Intermediate crude oil price crossed the $100 per barrel mark on Sunday.

Market sentiment was also influenced by weaker than expected US employment data released last week. Nonfarm payrolls declined by 92,000 in February, compared with expectations of a gain of 59,000.

Major Korean Stocks See Heavy Selling​

Large technology and financial stocks led the decline in Seoul’s equity market.

Samsung Electronics dropped 9.94 percent, while chipmaker SK hynix fell 10.98 percent.

Financial stocks also recorded losses, with KB Financial declining 5.7 percent and Shinhan Financial slipping 4.68 percent.

Defense and shipbuilding related stocks weakened as well, with Hanwha Aerospace falling 4.86 percent and Hanwha Ocean losing 3.95 percent.

Oil Refiners and Energy Plays Show Mixed Performance​

Oil refining companies traded mixed during the volatile session. SK Innovation declined 2.8 percent, while S Oil gained 3.16 percent.

Meanwhile, POSCO International surged 11.06 percent as investors showed optimism about the company’s energy business portfolio.

Korean Won Weakens Against the US Dollar​

In the currency market, the Korean won weakened against the US dollar. The local currency was trading at 1,497.3 won per dollar, down 20.9 won compared with the previous session.