South Korean Shares Plunge on Middle East Risks

The benchmark KOSPI fell 1.76% to close at 6,910 on Friday, extending losses from the previous session amid surging oil prices and higher US Treasury yields. WTI climbed above $100 per barrel, while Brent topped $107 amid escalating US-Iran tensions, raising concerns over inflation and further disruptions to oil supplies. Additionally, the US 10-year Treasury yield rose to its highest level since October 2023, while rate-hike bets for next week’s Fed meeting strengthened. Samsung Electronics (-3.44%) and SK hynix (-2.21%) led the decline, alongside losses in SK Square (-4.05%), Hyundai Motor (-1.67%), and LG Energy Solution (-1.37%). Separately, the BOK signaled that it will assess the timing and pace of further rate hikes as inflation remains above target, with CPI accelerating to 3.1% in August. Meanwhile, South Korea’s exports surged 83% year-on-year in the first 10 days of September, led by semiconductor shipments that jumped 270% amid robust AI demand.

The benchmark KOSPI fell 0.25% to close at 7,034 on Thursday, reversing gains from the previous session amid surging oil prices and higher US Treasury yields. Brent crude rose above $101 a barrel, its highest level since May, as escalating US-Iran tensions raised concerns over Middle East energy disruptions, adding to inflation concerns and uncertainty over monetary policy. The US 10-year Treasury yield also climbed to its highest level since November 2023, while Wall Street stocks fell for a third straight session, weighing further on Korean shares. Large-cap performance was mixed, with losses in LG Energy Solution (-1.21%), Samsung Biologics (-1.72%), Doosan Enerbility (-1.42%), and HD Hyundai Heavy Industries (-1.19%), while SK hynix edged up 0.16% and Samsung Electronics was flat. Meanwhile, South Korea and France agreed to strengthen cooperation in AI and semiconductors, including joint research and investment, offering some longer-term support for Korea's technology sector.

The benchmark KOSPI climbed 1.40% to close at 7,052 on Wednesday, recovering losses from the previous session, as continued gains in semiconductor stocks lifted sentiment. The Philadelphia Semiconductor Index rose 1.3% overnight, while SK hynix advanced 3.51% amid sustained optimism over AI-related demand. Additionally, defense and shipbuilding stocks gained following fresh overseas order developments. Hanwha Ocean gained 2.32% after being selected as the preferred bidder for a $509 million Thai frigate project. Other notable performers included Samsung Electro-Mechanics (2.48%), LG Energy Solution (6.46%), Doosan Enerbility (2.46%), Hanwha Aerospace (1.95%), HD Hyundai Heavy Industries (4.27%), and LS Electric (5.49%). Meanwhile, escalating Middle East tensions pushed Brent crude toward $100 per barrel, raising concerns over inflation and weighing on broader risk sentiment, while elevated US Treasury yields further limited risk appetite.