Seoul stocks nosedive on Trump's tariff shock

An electronic signboard at Hana Bank headquarters in Seoul shows the benchmark KOSPI closing at 2,328.20 points, Monday, down 137.22 points, or 5.57 percent, from the previous session. Yonhap

Seoul stocks plunged by more than 5 percent, Monday, as U.S. President Donald Trump’s tariff war began to take a toll on the country and across almost all Asian markets, according to market watchers.

The benchmark KOSPI plunged 5.57 percent, or 137.22 points, to close at 2,328.20 points, extending its losing streak to the fourth session since last Wednesday, when investors were rattled by Trump’s planned announcement later in the day on tariff rates against major U.S. trading partners.

The Korean won also weakened by 33.7 won against the U.S. dollar, closing at 1,467.8 won per dollar, as foreign investors dumped local stocks. This was the biggest drop since March 19, 2020, during the COVID-19 pandemic.

The market turned very volatile from its opening, and a sidecar trading curb took effect at one point for the first time since Aug. 5, 2024, which was labeled as “Black Monday.”

The sidecar trading curb was activated at 9:12 a.m., halting the selling of shares for five minutes after the KOSPI 200 index slid over 5 percent for more than a minute.

The index refers to the 200 largest listed companies, which account for roughly 70 percent of the market's value.

The secondary bourse Kosdaq, after remaining relatively secure from the U.S. tariff hike, tumbled 5.25 percent, or 36.09 points, to close at 651.30 points.

It marked the steepest fall since the 2024 Black Monday, when it retreated 11.3 percent to settle at 691.28 points.

The local currency traded markedly lower against the dollar, after it strengthened by 32.9 won to close at 1,434.1 won per dollar on Friday's daytime trading market.

“The U.S. tariff hike is indeed having a sweeping impact across the domestic financial markets,” iM Securities analyst Lee Woong-chan said.

In particular, Lee pointed out that major investors are increasingly unloading Seoul stocks in favor of safe-haven assets.

These investors include foreign investors, who net sold 2.09 trillion won ($1.42 billion) on the KOSPI, Monday — the fifth-largest amount to date — and institutional investors, who net sold 253.2 billlion won on the same day.

“The markets may suffer a freefall even more severe than they did on Black Monday, and we may even possibly draw an analogy between the present and the 2008-09 global financial crisis," he said.

Kim Dong-won, head of research at KB Securities, voiced a similar view.

“The stock market’s current pace of decline is too extreme, and the shockwave it sends to investors is even larger than the one during the COVID-19 pandemic era," Kim said.

Of the large caps on the KOSPI, export-oriented companies nosedived.

They included chipmaker Samsung Electronics, which lost 5.17 percent, and its cross-town rival SK hynix, which sank 9.55 percent.

LG Energy Solution slid 1.82 percent, while Hyundai Motor dropped 6.62 percent and Hanwha Aerospace fell 8.55 percent.

Domestic-focused companies also staggered, including KB Financial Group, which dropped 6.95 percent, and Samsung Life Insurance, which lost 4.2 percent.