The KOSPI fell 1.74% to 6448.31 as of 2:27 PM on the 3rd, reversing an earlier rebound attempt and dropping below the 6,500 level for the second consecutive day. The decline followed news that Iran launched missile and drone attacks on a US military base in Kuwait, reigniting geopolitical risk aversion among investors. The Korean stock market had initially opened higher on easing US Treasury yields and strong earnings from Dell and Broadcom, but reversed course in afternoon trading as the Middle East conflict escalated.
Samsung Electronics and SK Hynix Lead Major Stocks Lower
According to the Korea Exchange, most large-cap stocks reversed to declines in afternoon trading. Samsung Electronics fell 2.00% to 245,500 won, while SK Hynix dropped 2.36% to 1,575,000 won. Both stocks had opened up over 1% on positive US market signals before turning negative.
Other major stocks also declined, with Samsung Electro-Mechanics down 5.36%, Samsung Biologics falling 3.06%, and SK Square losing 2.55%. However, some financial and energy stocks maintained gains, including KB Financial up 3.84%, LG Energy Solution rising 3.60%, Doosan Enerbility gaining 3.13%, and Shinhan Financial Group advancing 2.26%.
Iran Attacks US Military Base in Kuwait with Missiles and Drones
The mid-session market decline was attributed to escalating Middle East tensions. On the 3rd (local time), the Kuwaiti military announced via social media that "Kuwait air defense is currently responding to hostile missile and drone attacks following Iran's invasion." Iranian state TV reported that Iran targeted the US military base in Kuwait in response to US crimes against Iranian citizens.
The attack represents retaliation by Iran's Islamic Revolutionary Guard Corps after the US struck Iranian targets near the Strait of Hormuz at the end of last month. The renewed military tensions between the US and Iran have intensified after briefly reigniting in recent days. Overnight, the New York stock market had closed higher for the first time in four sessions as Treasury yields stabilized, with semiconductor stocks surging and initially boosting Korean market sentiment.
Heo Jae-hwan, researcher at Eugene Investment & Securities, stated that "when oil prices stabilize, conflicts between the two sides intensify, but when oil prices rise too high, both the US and Iranian governments are likely to exercise caution."
FAQ
Why did KOSPI stocks fall on the 3rd?
The KOSPI fell 1.74% to 6448.31 following news that Iran launched missile and drone attacks on a US military base in Kuwait, triggering geopolitical risk aversion among investors and reversing earlier gains driven by positive US market signals.
What did Iran attack in Kuwait?
Iran's Islamic Revolutionary Guard Corps attacked a US military base in Kuwait with missiles and drones on the 3rd (local time), according to announcements from the Kuwaiti military and Iranian state TV, in retaliation for US strikes on Iranian targets near the Strait of Hormuz at the end of last month.
How did major Korean stocks perform during the decline?
Samsung Electronics fell 2.00% to 245,500 won and SK Hynix dropped 2.36% to 1,575,000 won, while Samsung Electro-Mechanics declined 5.36%, though some financial stocks like KB Financial rose 3.84% and LG Energy Solution gained 3.60%.
