Seoul stocks tumble as Trump threatens 'extremely hard' strikes on Iran

A screen at Hana Bank headquarters in central Seoul shows U.S. President Donald Trump delivering a speech on the Iran war, alongside the KOSPI, Thursday. The benchmark index fell 244.65 points, or 4.47 percent, to close at 5,234.05. Yonhap

Seoul stocks tumbled Thursday after U.S. President Donald Trump warned of "extremely hard" strikes on Iran, rattling global markets and fueling risk-off sentiment among foreign investors.

Trump's remarks dashed hopes for a de-escalation in the Middle East, sending the Korean won sharply lower. The currency closed at 1,519.7 won per dollar, down 18.4 won from the previous session.

The benchmark KOSPI opened at 5,541.20, up 62.50 points, or 1.14 percent, from the previous session, but quickly turned lower as foreign investors led a broad sell-off. It fell 244.65 points, or 4.47 percent, to close at 5,234.05.

Foreign investors and institutions were heavy net sellers, offloading 132.9 billion won ($87.6 million) and 1.4512 trillion won, respectively. Retail investors moved to cushion the decline, buying a net 1.2052 trillion won.

Market bellwethers also came under pressure. Samsung Electronics fell 5.91 percent to 178,400 won, while SK hynix dropped 7.05 percent to 830,000 won.

A sell-side sidecar was triggered around 2:46 p.m., according to the Korea Exchange, as KOSPI 200 futures fell 5.04 percent, temporarily halting program selling. A KOSPI sell-side sidecar is triggered when KOSPI 200 futures fall more than 5 percent from a reference price and maintain that level for at least one minute.

The tech-heavy Kosdaq index showed a similar pattern, opening at 1,126.30, up 0.91 percent from a day earlier, before turning lower. It closed at 1,056.34, down 5.36 percent.

A sell-side sidecar was also triggered at around 2:34 p.m. as Kosdaq 150 futures and the Kosdaq 150 index fell 6.01 percent and 6.44 percent, respectively.

The decline in Korean equities followed Trump's prime-time address on the Iran conflict, which aired around 9 p.m. Wednesday (local time).

The U.S. president said Washington would strike Tehran "extremely hard" within the next two to three weeks, adding that U.S. forces would "finish the job" as "core strategic objectives are nearing completion," further dampening hopes for a ceasefire in Iran.

In the foreign exchange market, the Korean currency opened at 1,512.2 per dollar — up 10.9 won from the previous session — before closing at 1,519.7 won. It hovered around the 1,510 level before Trump's speech, and briefly climbed over 1,520 after the speech.

Trump's remarks on Iran also pushed up global oil prices. U.S. West Texas Intermediate crude hovered around $106 per barrel, while Brent crude stood around $107. Dubai crude, which accounts for about 80 percent of Korea's oil imports, traded at around $128 per barrel.