Seoul: South Korean stocks fell by more than 1.5 percent on Thursday, ending a four-day winning streak as investors analyzed conflicting statements from Washington and Tehran regarding their recent two-week ceasefire. The Korean won also depreciated against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped by 94.33 points, or 1.61 percent, closing at 5,778.01. The trading volume was substantial, with 1 billion shares valued at 29.4 trillion won (approximately US$19.8 billion) changing hands. The market saw 509 losers compared to 356 gainers.
Foreign investors sold a net 874 billion won worth of shares, whereas individual investors purchased a net 298 billion won. Institutional investors bought a net 206 billion won. This sell-off came in the wake of a ceasefire agreement between the United States and Iran, which included the reopening of the strategic Strait of Hormuz.
Despite this agreement, uncertainties lingered as the two nations held differing views on whether the deal encompassed halting Israel's military actions in Lebanon. Iran signaled a potential withdrawal from the agreement, including its pledge to keep the Strait of Hormuz open, if Israel's attacks on Lebanon persisted. In contrast, Washington maintained that the issue was not part of the deal.
Analysts pointed out that these disagreements between the United States and Iran, ahead of upcoming negotiations, prompted caution among investors. Lee Kyoung-min, a researcher at Daishin Securities, indicated that concerns over a potential closure of the Strait of Hormuz elevated global crude prices and kept investors vigilant. Kim Seok-hwan, an analyst at Mirae Asset Securities, added that Israel's ongoing attacks on Lebanon left room for further escalation.
In the stock market, technology shares saw a decline as investors took profits from recent gains. Samsung Electronics fell by 3.09 percent to 204,000 won, while SK hynix decreased by 3.39 percent to 998,000 won. Defense sector stocks also faced losses, with Hanwha Aerospace dropping 2.22 percent to 1,451,000 won and Hyundai Rotem declining 1.69 percent to 203,000 won.
Conversely, oil refiners experienced gains due to a rebound in global crude prices amid geopolitical uncertainties. SK Innovation rose by 2.00 percent to 124,000 won, and S-Oil increased by 6.69 percent to 119,600 won. Mobile carriers were among the gainers as well, with SK Telecom climbing 5.39 percent to 93,800 won and LG Uplus edging up 0.37 percent to 16,190 won.
The local currency stood at 1,482.5 won against the U.S. dollar as of 3:30 p.m., down 11.9 won from the previous session.