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Seoul stocks sink over 1 pct on Mideastern concerns, Korean won plunges

All News 15:57 January 08, 2020

SEOUL, Jan. 8 (Yonhap) -- South Korean stocks dipped more than 1 percent Wednesday on escalating military tensions in the Middle East that are feared to push up global oil prices. The Korean won fell sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 24.23 points, or 1.11 percent, to close at 2,151.31, after dipping to an intraday low of 2,137.72 points. Trading volume was heavy at nearly 900 million shares worth over 8.6 trillion won (US$7.34 billion), with losers greatly outnumbering winners 847 to 48.

The index remained sharply lower throughout the session after getting off to a rough start on reports of Iran attacking several U.S. military bases in Iraq in response to the U.S. killing Qassem Soleimani.

The head of Iran's elite Quds Force was killed in Baghdad late last week in a U.S. drone attack.

Washington has yet to officially confirm any casualties from Iran's missile attacks but earlier said any attack by Iran would be met by additional strikes against multiple Iranian targets.

Market observers here, however, insisted the U.S.-Iran conflict will likely be short-lived.

"The geopolitical risks have heightened following Iran's missile attack on U.S. military bases. However, their impact on the financial market is expected to be limited, and one of the reasons is because President Donald Trump is considered to use a 'hard talk, but soft stick' (approach)," NH Investment & Securities analyst Cho Yeon-ju said.

Yoon Yeo-sam, an analyst at Meritz Securities, agreed the U.S. president is unlikely to commit to a full-fledged war with Iran, especially ahead of the presidential election this year.

"I believe it will end up being a short-term conflict," Yoon said.

Foreigners remained net buyers for a fourth consecutive session, purchasing a net 259.5 billion won, while institutions offloaded a net 239.6 billion won. Retail investors dumped a net 19.5 billion won.

Most large caps ended up in negative terrain despite market bellwether Samsung Electronics greatly advancing on an estimate-beating fourth-quarter earnings forecast.

Samsung Electronics surged 1.79 percent to close at 56,800 won, while No. 2 chipmaker SK hynix spiked 3.62 percent to an all-time high of 97,400 won.

Top automaker Hyundai Motor, on the other hand, plunged 3.03 percent to 112,000 won, with its smaller affiliate Kia Motors tumbling 1.78 percent to 41,300 won.

Oil-reliant companies suffered a setback from the mounting tension in the Middle East.

Leading chemical company LG Chem dipped 2.89 percent to 302,000 won, while top refiner SK Innovation plunged 5.19 percent to 137,000 won.

The Korean won closed at 1,170.80 won to the dollar, down 4.40 won from the previous session's close.

The local currency earlier dipped more than 1 percent against the dollar but recovered ground after local authorities vowed swift measures to help stabilize the market if necessary.

bdk@yna.co.kr
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