Shares nosedive almost 9% on tech losses amid Middle East tensions
Korean stocks tumbled after heavy sell-offs of Samsung Electronics and SK hynix, as renewed Middle East tensions and market volatility pushed the won lower.
Published
A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 6,806.93 points on July 13, down 669.01 points, or 8.95 percent, from the previous trading session.YONHAP
Shares plunged almost 9 percent Monday as investors dumped technology stocks for profit-taking amid renewed tensions in the Middle East. The Korean won fell against the dollar.
The Kospi fell 669.01 points, or 8.95 percent, to close at 6,806.93 after falling as low as 6,783.43.
Trade volume was moderate at 469.86 million shares worth 39.8 trillion won ($26.5 billion), with decliners far outnumbering gainers 713 to 179.
Institutions and foreigners sold a net 2.2 trillion won and 1.7 trillion won worth of shares, respectively, while individuals bought a net 3.9 trillion won.
After opening 0.85 percent lower, the Kospi extended its losses, triggering a circuit breaker that temporarily halted trading of Kospi-listed stocks for 20 minutes. It marked the seventh activation of the measure this year.
On Friday, U.S. stocks advanced, buoyed by Korean chipmaker SK hynix's multibillion-dollar U.S. share offering. The Dow Jones Industrial Average gained 0.29 percent, while the tech-heavy Nasdaq composite also rose 0.29 percent.
SK hynix's American depositary receipts (ADRs) on the Nasdaq closed at $168 each, well above the offering price of $149.
Despite its successful U.S. market debut, SK hynix shares tumbled as investors took profits and shifted to the company's ADRs, analysts said.
The headquarters of SK hynix in Icheon, GyeonggiYONHAP
Investor sentiment was also dampened by heightened uncertainty in the Middle East after the United States and Iran exchanged fresh strikes over the status of the Strait of Hormuz.
“The country's newly introduced single-stock leveraged exchange-traded funds linked to Samsung Electronics and SK hynix continued to fuel volatility in the stock market,” Samsung Securities said in a research note.
Tech stocks led the decline.
Market bellwether Samsung Electronics plunged 10.7 percent to 254,500 won, while its chipmaking rival SK hynix plummeted 15.37 percent to 1,845,000 won.
Top carmaker Hyundai Motor fell 2.95 percent to 444,000 won, and defense giant Hanwha Aerospace declined 3.21 percent to 936,000 won.
Among gainers, leading battery maker LG Energy Solution rose 0.77 percent, and leading refiner SK Innovation climbed 7.09 percent to 110,200 won.
The local currencyweakened by 2 won from the previous session to trade at 1,503.4 against the dollar at 3:30 p.m.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4.1 basis points to 3.81 percent, and the return on benchmark five-year government bonds climbed 3.3 basis points to 4.04 percent.
