South Korean Stocks Slide Nearly 2 Percent Amid Middle East Tensions and Fed Policy Uncertainty

South Korean Stocks Slide Nearly 2 Percent Amid Middle East Tensions and Fed Policy Uncertainty​

KOSPI Declines as Global and Geopolitical Pressures Weigh on Markets​

Seoul, March 19: South Korean equities traded sharply lower on Thursday, with the benchmark index nearing a 2 percent decline, as escalating tensions in the Middle East and uncertainty around US monetary policy unsettled investor sentiment.

The Korea Composite Stock Price Index (KOSPI) dropped 112.91 points, or 1.19 percent, to 5,812.12 as of 11:20 a.m., reflecting broad-based selling across major sectors.

Global Market Weakness Adds to Pressure​

Overnight losses on Wall Street added to the cautious mood in Asian markets. The Dow Jones Industrial Average fell 1.63 percent, while the Nasdaq Composite declined 1.46 percent and the S&P 500 slipped 1.36 percent.

Investor risk appetite weakened after geopolitical tensions intensified in the Middle East. Israel reportedly targeted Iran’s largest natural gas field, South Pars, prompting a retaliatory strike by Iran on a major liquefied natural gas facility in Qatar. The developments pushed global oil prices higher, raising concerns over inflation.

Fed Signals Caution as Oil Prices Stoke Inflation Concerns​

Market sentiment was further impacted by signals from the US Federal Reserve. The central bank maintained its benchmark interest rate in the 3.5 to 3.75 percent range.

Federal Reserve Chair Jerome Powell stated that rising oil prices have increased inflationary pressures, reinforcing a cautious stance on the timing of potential rate cuts.

Heavyweight Stocks Lead Market Decline​

In Seoul, major technology and industrial stocks led the downturn. Samsung Electronics declined 2.64 percent, while SK Hynix fell 3.12 percent.

Automobile manufacturers also came under pressure, with Hyundai Motor dropping 3.3 percent and Kia losing 1.6 percent.

Other notable declines included SK Square, which fell 2.7 percent, and LG Energy Solution, down 1.69 percent. Hanwha Aerospace slipped 1.22 percent, while HD Hyundai Heavy Industries declined 2.54 percent.

Select Financial and Energy Stocks Buck Trend​

Despite the broader weakness, a few stocks managed to post gains. Doosan Enerbility rose 0.84 percent, emerging as one of the limited gainers during the session.

Financial stocks also showed resilience, with KB Financial advancing 1.1 percent and Shinhan Financial adding 0.42 percent.

Korean Won Weakens Against US Dollar​

The Korean won traded at 1,496.9 per US dollar as of 11:20 a.m., marking a decline of 13.8 won from the previous session. The currency had initially breached the 1,500 won level against the dollar at the market open before recovering slightly.