The KOSPI reversed an early attempt at a rebound and slid more than 1% in afternoon trading, as news that Iran had struck a U.S. military base in Kuwait with missiles and drones revived geopolitical risk aversion during the session.
The benchmark index was down 1.74% at 6,448.31 as of 2:27 p.m., according to the Korea Exchange. It was the second straight day of losses following a sharp drop the previous session, pushing the index below the 6,500 mark.
Most large-cap stocks also turned lower. Samsung Electronics (005930.KS) was trading 2.00% down at 245,500 won, while SK hynix (000660.KS) fell 2.36% to 1.575 million won. Both had opened more than 1% higher on the back of calmer U.S. Treasury yields overnight and strong earnings from Dell and Broadcom, before reversing in the afternoon.
Other major names also weakened, including Samsung Electro-Mechanics (009150.KS), down 5.36%, Samsung Biologics (207940.KS), down 3.06%, and SK Square (402340.KS), down 2.55%. Bucking the trend were KB Financial Group (105560.KS), up 3.84%, LG Energy Solution (373220.KS), up 3.60%, Doosan Enerbility (034020.KS), up 3.13%, and Shinhan Financial Group (055550.KS), up 2.26%.
Traders pointed to the Middle East as the trigger for the intraday slide, after reports that Iran had launched missile and drone attacks on a U.S. military base in Kuwait. Foreign media reported that the Kuwaiti military said on social media that its air defenses were responding to hostile missile and drone attacks stemming from an Iranian incursion. Iranian state television reported that U.S. military bases in Kuwait had been targeted in response to what it called American crimes against the Iranian people.
Iran's Islamic Revolutionary Guard Corps is retaliating for U.S. strikes on Iranian targets near the Strait of Hormuz late last month, in a renewed escalation of military tension between Washington and Tehran. On Wall Street overnight, stocks closed higher for the first time in four sessions as Treasury yields paused, and a broad rally in semiconductor shares had lifted sentiment in the Korean market.
"When oil prices stabilize, the conflict between them tends to intensify, but if oil prices get too high, both the U.S. and Iranian governments are likely to hold back," said Huh Jae-hwan, an analyst at Eugene Investment & Securities.
