Samsung Electronics and SK Hynix Drop Over 4% as Middle East Risks Rattle KOSPI

As military clashes between the United States and the Islamic Republic of Iran heighten geopolitical tensions in the Middle East, the South Korean stock market is swinging sharply in early trading. Continued large-scale selling by foreign investors pushed the Korea Composite Stock Price Index (KOSPI) below the 6,100 level, at one point dragging it down to the low 6,000 range. Blue-chip heavyweights Samsung Electronics and SK Hynix are also trading weaker in tandem.

As of 11:05 a.m. on the 3rd, the KOSPI was down 3.13% from the previous session at 6,048.77. The index opened about 1% lower and then extended its losses as the session progressed.
In the Korea Exchange Securities Market (KOSPI market), foreign investors have been net sellers of 3.1359 trillion won, leading the decline in the index. Retail investors have net bought 3.0686 trillion won, while institutions are showing a modest net buying position of 2 billion won. Nonetheless, the heavy foreign selling is clearly weighing on the broader index.
Market participants believe that concerns over foreign capital outflows have grown as the impact of airstrikes on Iran by the United States and Israel coincides with upward pressure on the US dollar–South Korean won exchange rate.
Overnight, the New York stock market opened weaker but finished mixed as bargain hunters stepped in. The Dow Jones Industrial Average (DJIA) slipped 0.15%, while the S&P 500 Index (S&P 500) and the NASDAQ Composite Index rose 0.04% and 0.36%, respectively. At the same time, international oil prices have surged amid escalating tensions in the Middle East, adding to market volatility.

Against this backdrop, most of the top market-cap stocks are in negative territory. Samsung Electronics is down 4.16%, and SK Hynix is off 4.24%. Hyundai Motor is sliding more than 6%, while LG Energy Solution is also losing over 3%.
Analysts in the securities industry say that short-term volatility driven by geopolitical risks is inevitable. However, they also stress the need to assess policy momentum and corporate earnings trends in tandem.
Lee Kyung-min, a researcher at Daishin Securities, stated, "We see additional upside potential for the KOSPI up to the 6,500 level, but at this point the market needs to cool off from short-term overheating and digest existing supply if it is to move much higher." He added, "After mid-month, policy and earnings momentum are likely to strengthen again, and the volatility in the first half of the month should provide an opportunity to increase exposure to leading stocks."

hsg@fnnews.com Han Seung-gon Reporter