Seoul shares down for 2nd day on prolonged Hormuz shutdown; won decline
The screen displays the Korean won-U.S. dollar exchange rate and the KOSPI index at a dealing room at Woori Bank's headquarters in central Seoul, Friday. Yonhap
Korean stocks closed lower Friday as investors cautiously watched situations involving the Strait of Hormuz after the new Iranian leader vowed to maintain the blockade of the sea channel. The local currency fell against the greenback.
The Korea Composite Stock Price Index (KOSPI) moved down 96.01 points, or 1.72 percent, to close at 5,487.24. The KOSPI fell 0.48 percent Thursday.
Trade volume was moderate at 893.6 billion shares worth 22.9 trillion won ($15.3 billion), with losers outpacing gainers 552 to 336.
Foreigners sold a net 1.46 trillion won, while individuals bought a net 2.45 trillion won. Institutions offloaded a net 1 trillion won.
Global crude prices continued to fluctuate, surpassing $100 per barrel again after Mojtaba Khamenei, who was named to succeed his father as Iran's new leader, vowed to continue the blockade at the crucial waterway.
"While the U.S. holds clear dominance in military power, the actual upper hand appears to lie with Iran due to the Strait of Hormuz," Han Ji-young, a researcher at Kiwoom Securities, said.
Lee Kyoung-min, a researcher at Daishin Securities, said the geopolitical tension continues to weigh down on the market, with global crude prices rising on reports that Iran has installed mines in the waterway.
"Sectors such as nuclear energy, meanwhile, benefited from the passage of a special bill on U.S. investment," Lee added.
The National Assembly on Thursday passed a special bill on Korea's $350 billion investment pledge to the U.S. under a trade deal between the two nations.
In Seoul, top tech giant Samsung Electronics slipped 2.34 percent to 183,500 won, and SK hynix lost 2.15 percent to 910,000 won.
Oil refiners finished weaker, with SK Innovation falling 7.48 percent to 112,600 won and S-Oil sliding 8.47 percent to 108,000 won.
Due to global oil supply disruptions, investors scooped up nuclear power plant builders, with Daewoo Engineering & Construction soaring 17.78 percent to 12,320 won and Hyundai Engineering & Construction adding 5.59 percent to 164,400 won.
Game developer Krafton shot up 8.19 percent to 244,500 won amid reports it has joined ties with Hanwha Aerospace, Korea's leading defense systems company, to develop physical artificial intelligence (AI) technologies.
The Korean won was trading at 1,493.7 won against the U.S. dollar, down 12.5 won from the previous session, as of 3:30 p.m.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 6.7 basis points to 3.338 percent, and the return on the benchmark five-year government bonds rose 6 basis points to 3.556 percent.