Seoul: South Korean stocks nosedived more than 5.5 percent Monday, extending their losing streak to a fourth consecutive day, as investors panicked over an escalating global trade war triggered by U.S. reciprocal tariffs. The Korean won fell by the most since the COVID-19 pandemic against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) shed 137.22 points, or 5.57 percent, to close at 2,328.20. The tech-heavy KOSDAQ also dipped 5.8 percent.
Shortly after the stock market opened, the bourse operator issued the first sidecar order since August 2024, halting program purchasing for five minutes after the KOSPI 200 index shed over 5 percent for more than one minute. Trade volume was notably heavy at 615.2 million shares worth 10.5 trillion won (US$7.16 billion), with losers far outnumbering winners 862 to 68. Foreign investors offloaded 2.09 trillion won worth of local shares, while retail investors and institutions bought 1.67 trillion won and 253.2 billion won, respectively.
The KOSPI dropped as investors offloaded stocks amid growing fears of a recession following the Trump administration’s announcement of reciprocal tariffs last week. This development prompted China to retaliate with 34 percent tariffs on U.S. goods and export controls on rare earths, while threatening further measures soon. “Volatility in the Korean stock markets heightened on the Trump administration’s stronger-than-expected tariff policies,” Park Seok-joong, an analyst at Shinhan Securities, commented. “None of the Korean export industries will be able to evade the influence of the U.S. tariff scheme.”
Wall Street experienced its worst week since the COVID-19 pandemic last week, with the S and P 500 plunging 6 percent on Friday (U.S. time), while the Dow Jones Industrial Average fell 5.5 percent and the tech-heavy Nasdaq composite dropped 5.8 percent. In Seoul, many major stocks hit their lowest point in a year. Market leader Samsung Electronics slid 5.17 percent to 53,200 won, and SK hynix fell 9.55 percent to 164,800 won. Top automaker Hyundai Motor declined 6.62 percent to 179,100 won, and defense firm Hanwha Aerospace tumbled 8.55 percent to 642,000 won.
Leading shipbuilders Hanwha Ocean and HD Hyundai Heavy fell 9.81 percent and 8.17 percent to 62,500 won and 275,500 won, respectively. Major bio company Samsung Biologics lost 5.71 percent to 1.01 million won, while steel giant POSCO Holdings slumped 6.59 percent to 255,000 won. Financial shares also dropped sharply, with KB Financial dipping 6.95 percent to 72,300 won and Meritz Financial losing 5.66 percent to 111,700 won.
The local currency was quoted at 1,467.8 won per dollar at 3:30 p.m., down 33.7 won from the previous session. This marked the steepest single-day decline since March 19, 2020, when the currency dropped by 40 won amid the COVID-19 pandemic.