Seoul stocks sink as Middle East war spurs foreign selloffs

A stock ticker at Hana Bank headquarters in central Seoul shows the benchmark KOSPI closing at 5,277.30, down 161.57 points, or 2.97 percent, Monday. Yonhap

Seoul stocks tumbled Monday as the entry of Iran-aligned Houthi military forces into the Middle East conflict sent fresh shockwaves through global markets, fueling a risk-off sentiment among foreign investors.

On Saturday, Yemen’s Iran-backed Houthi rebels said they had launched an attack on Israel, opening a new front in the already strained standoff involving the U.S., Israel and Iran. The United States has also ramped up its military presence in the region, deploying several hundred additional special forces.

The benchmark KOSPI opened at 5,181.80, down 4.73 percent from the previous session. While the index recovered some losses during the session, it still fell 161.57 points overall, or 2.97 percent, to close at 5,277.30, the first time the index has finished in the 5,200 range since March 9.

Foreign investors drove the selloff, offloading a net 2.52 trillion won ($1.66 billion) in shares. Retail investors and institutions moved to cushion the decline, buying a net 1.53 trillion won and 592.4 billion won, respectively, though their purchases were not enough to offset foreign selling.

The tech-heavy Kosdaq index mirrored the broader trend, opening 3.48 percent lower at 1,101.77 and ending at 1,107.05, down 3.02 percent. On the secondary bourse, both foreign and institutional investors were net sellers, offloading 147.6 billion won and 135.1 billion won, respectively, while retail investors bought a net 340.7 billion won, helping limit the downside.

Heavyweight shares, often seen as proxies for foreign investor positioning, also came under pressure. Samsung Electronics fell 1.89 percent to 176,300 won, while SK hynix dropped 5.31 percent to 873,000 won.

Currency markets reflected the same tone. In Seoul’s onshore foreign exchange market, the Korean won closed at 1,515.7 per dollar, weakening by 6.8 won from the previous session. With this, the won’s weekly average has climbed above the 1,500 level for the first time in 17 years.

At the core of the market’s anxiety was oil, with crude prices extending their surge as traders priced in a higher risk of supply disruptions.

Brent crude, the global benchmark, climbed above $115 per barrel, while the U.S. West Texas Intermediate crude hovered around $100. Dubai crude, Korea’s main import benchmark, traded at $129.99.