South Korean Shares Slide on Oil Shock

The benchmark KOSPI fell more than 2% to around 5,770 on Thursday, ending a three-day rally, as tensions in the Middle East pushed oil prices higher. Brent crude climbed above $107 per barrel following attacks on key energy infrastructure and threats to supply routes, stoking concerns over inflation and rising energy import costs for South Korea. The Federal Reserve’s decision to keep rates steady also added to the downside, as investors assessed the impact of higher oil prices on inflation. The Korean won slipped past the 1,500 level against the dollar, reflecting capital outflows and external vulnerability. Asian markets followed Wall Street lower overnight, reinforcing risk-off sentiment. Heavyweight technology shares led losses, including Samsung Electronics (-3.6%) and SK hynix (-4.3%), along with declines in Hyundai Motor (-3.3%), LG Energy Solution (-2.4%), SK Square (-3.5%), Kia Corporation (-2.0%), and HD Hyundai Heavy Industries (-3.4%).

The benchmark KOSPI surged 5.04% to close at 5,925 on Wednesday, its highest level in two weeks, driven by strong gains in technology stocks. Heavyweight semiconductor shares Samsung Electronics (7.53%) and SK hynix (8.87%) advanced sharply on renewed optimism over artificial intelligence demand following updates from Nvidia’s GTC conference, where Korean chipmakers were highlighted as key partners in next-generation AI systems. Other notable gainers included Hyundai Motor (4.41%), SK Square (7.33%), and Kia Corporation (4.66%). Sentiment was also lifted by hopes for policy support ahead of a government market reform meeting. Meanwhile, investors remained cautious over Middle East tensions, with oil price volatility still a risk for South Korea’s import-dependent economy despite recent easing. The Korean won also strengthened as the dollar softened ahead of the Federal Reserve’s policy decision, with rates expected to hold, helping steady sentiment.

The benchmark KOSPI climbed 1.63% to close at 5,640 on Tuesday, extending gains for a second straight session, as easing oil prices lifted global risk appetite and supported energy-sensitive markets. Crude prices fell after efforts to stabilize tanker flows through the Strait of Hormuz, easing concerns over supply disruptions that had recently pressured inflation and the Korean won. The rally tracked strong gains on Wall Street, where major indexes advanced amid cooling energy prices and improving sentiment around the Middle East conflict, reinforcing a broader risk-on tone across global equities. Heavyweight Samsung Electronics rose 2.76% on continued optimism around artificial intelligence demand. Other major stocks also advanced, including Hyundai Motor (3.16%), LG Energy Solution (3.96%), SK Square (4.45%), Kia Corporation (3.27%), and Celltrion (3.00%).