Seoul shares fall again, dropping over 6% on tech losses amid Middle East tensions

Seoul shares again plummeted Thursday, led by steep losses in technology heavyweights, as escalating tensions in the Middle East weighed on investor sentiment. The Korean won rose against the US dollar.

After opening 4.45 percent lower, the benchmark Korea Composite Stock Price Index extended its losses to close at 6,820.60, down 463.81 points, or 6.37 percent from the previous session, after falling as low as 6,730.87.

The Korea Exchange, the country’s bourse operator, activated a sell-side sidecar on the Kospi for 20 minutes at around 9:10 a.m. after the benchmark index fell more than 5 percent.

The decline came after the index surged 6.24 percent Wednesday as softer-than-expected US inflation data eased concerns about near-term Federal Reserve interest rate hikes.

Adding to investor jitters, the Bank of Korea raised its benchmark interest rate by a quarter percentage point to 2.75 percent earlier in the day, the first increase in 3 1/2 years, to curb inflation amid escalating tensions in the Middle East.

The US launched fresh strikes on Iran, escalating tensions in the Middle East and renewing concerns over potential disruptions to regional energy supplies.

“Profit-taking followed sharp gains in technology stocks a session earlier, while persistent concerns over the semiconductor industry kept the index under pressure,” Kang Jin-hyeok, an analyst at Shinhan Securities Co., said.

Institutional and foreign investors sold a net 2.37 trillion won ($1.6 billion) and 1.38 trillion won worth of shares, respectively, while retail investors bought a net 3.66 trillion won.

Technology stocks led the decline.

Market bellwether Samsung Electronics plunged 8.77 percent to 255,000 won, while rival chipmaker SK hynix tumbled 11.53 percent to 1,842,000 won.

Top automaker Hyundai Motor fell 2.07 percent to 425,000 won, while steelmaker Posco Holdings slipped 0.95 percent to 311,500 won.

Among gainers, shipbuilder Hanwha Ocean rose 5.73 percent to 86,700 won, while leading beverage firm Hitejinro gained 2.47 percent to 14,910 won.

The Korean won was quoted at 1,480.4 won against the US dollar at 3:30 p.m., up from 1,484.7 won the previous session. (Yonhap)