Seoul Shares Plunge on U.S. Tech Sell-off and Geopolitical Tensions

The benchmark Korea Composite Stock Price Index (KOSPI) opened sharply lower on Wednesday, falling 4.96 percent at the opening bell. The index continued to decline throughout the morning, dropping 6.61 percent to 6,416.06 by 9:15 a.m. and trading more than 5 percent lower as late as 11:20 a.m. The Korea Exchange activated a sell-side sidecar shortly after the opening bell, which suspended program trading for five minutes. This mechanism is triggered when the KOSPI 200 Futures Index falls 5 percent or more for at least one minute.

The decline followed overnight losses on Wall Street, where the Nasdaq Composite Index fell 1.33 percent, the S&P 500 lost 0.69 percent, and the Dow Jones Industrial Average shed 0.22 percent. Investors were weighed down by rising bond yields and oil prices, driven by stalled peace efforts between the United States and Iran. The U.S. 30-year Treasury yield reached its highest level since 2007 amid concerns that high energy prices could sustain inflation.

In Seoul, technology and chipmaking stocks led the losses. Samsung Electronics retreated between 7.08 percent and 7.64 percent, while SK hynix dipped between 8.36 percent and 9.63 percent. Other major losses included Hyundai Motor and SK Innovation. Conversely, Hanwha Aerospace rose between 2.97 percent and 3.66 percent following reports that its U.S. unit won a contract to deliver K9 self-propelled howitzer prototypes to the U.S. Army. The Korean won was trading at 1,413.6 won against the U.S. dollar at 9:15 a.m. and 1,406.3 won at 11:20 a.m.