Seoul: South Korean stocks dropped over 3 percent late Thursday morning after U.S. President Donald Trump warned that the United States would strike Iran "extremely hard" over the next few weeks. The benchmark Korea Composite Stock Price Index (KOSPI) fell 197.1 points, or 3.6 percent, to 5,281.6 as of 11:20 a.m.
According to Yonhap News Agency, the index initially opened more than 1 percent higher, following overnight gains on Wall Street. However, it turned negative after Trump's remarks dashed hopes for a swift end to the ongoing conflict. In a prime-time address earlier in the day, Trump stated, "We are going to hit them extremely hard over the next two to three weeks" and threatened to "bring them back to the Stone Age," indicating that energy facilities in Iran could be targeted if a deal is not reached.
The warning triggered a rise in global oil prices, with Brent crude surging more than 4 percent to surpass US$100 a barrel. The conflict, which began in late February after U.S.-Israeli strikes on Iran, has caused global oil prices to spike due to supply disruptions, unsettling financial markets and increasing concerns over inflation and a potential economic slowdown. In Seoul, most big-cap shares experienced declines.
Market bellwether Samsung Electronics dropped 5.17 percent, while chip giant SK hynix decreased 5.15 percent. Leading automaker Hyundai Motor saw a fall of 4.3 percent, and its affiliate Kia lost 2.06 percent. Leading battery maker LG Energy Solution went down 0.37 percent, and artificial intelligence investment firm SK Square fell 5.59 percent. Nuclear power plant builder Doosan Enerbility decreased by 4.72 percent.
Leading financial firm KB Financial shed 1.35 percent, and major steelmaker POSCO slid 1.01 percent. Major shipbuilder HD Hyundai Heavy retreated 2.21 percent, and its competitor Hanwha Ocean declined 4.49 percent. Bio shares showed mixed performance, with bio giant Samsung Biologics climbing 1.34 percent, while Celltrion fell 3.83 percent. Among gainers, defense giant Hanwha Aerospace surged 6.3 percent, and Samsung SDI increased by 2.2 percent.
The local currency was trading at 1,520.2 won against the greenback at 11:20 a.m., down 18.9 won from the previous session.