Seoul:Shares in South Korea fell sharply on Monday, dropping over 3%, as a significant sell-off in technology stocks driven by inflation concerns took a toll on the market. This decline marks the fourth consecutive session of losses, coinciding with rising oil prices.

According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) started the day slightly down by 0.07% and continued to lose ground, closing at 6,384.24, a decrease of 241.69 points or 3.65%. The trading volume was moderate, with 313 million shares exchanged, valued at 21.33 trillion won (approximately US$16 billion), and the number of declining stocks outnumbered advancing ones by 717 to 166.

Institutional investors and foreign traders offloaded stocks worth a net total of 110.65 billion won and 2.02 trillion won, respectively, while individual investors made net purchases totaling 1.47 trillion won. Lim Seung-mi, an analyst at Hana Securities Co., noted in a research note that the KOSPI's decline was driven by rebalancing in semiconductor-focused exchange-traded funds and concerns over the potential completion of treasury stock purchases by Samsung Electronics and SK hynix.

Oil prices experienced an uptick due to escalating tensions in the Middle East, following renewed Houthi attacks on a major airport in Saudi Arabia over the weekend. Analysts warned that an expansion of regional conflicts could exacerbate disruptions in energy supplies, further increasing inflationary pressures and complicating the Federal Reserve's efforts to manage rising inflation.

The downturn in Seoul was primarily led by technology stocks. Samsung Electronics, a market leader, saw its shares fall by 4.39% to 250,500 won, while SK hynix dropped 4.52% to 1.6 million won. Defense company Hanwha Aerospace decreased by 3.25% to 862,000 won, and Hyundai Motor, a leading car manufacturer, fell by 1.39% to 320,000 won. Conversely, shipping firm HMM gained 4.81% to reach 21,800 won, and tobacco company KT and G increased by 1.58% to 180,200 won.

The Korean won appreciated against the U.S. dollar, quoted at 1,335.1 won compared to 1,342.8 won from the previous session's close. In the bond market, prices rose, leading to lower yields. The yield on three-year Treasurys dropped by 6.2 basis points to 3.921, and the yield on five-year government bonds declined by 5.7 basis points to 4.101.