South Korean Shares Plummet 8%, Trigger Circuit Breakers Amid Worsening Currency Crisis

South Korean Financial Markets Round-up

• Market Sentiment: Risk-off sentiment has heightened in the wake of the escalating Middle East conflict, leading to significant fluctuations in the local financial markets.
• Stock Market: The KOSPI benchmark index plummeted by 8.11% to 5,132.07 at 0148 GMT, triggering circuit breakers for the second time this month. The index experienced its largest weekly drop since March 2020, declining by 10.6%.
• Currency Market: The Korean won weakened by 1% against the US dollar, trading at 1,497.5 per dollar on the onshore settlement platform. This marks a 1.06% decrease from its previous close at 1,481.6 and approaches the psychological threshold of 1,500 per dollar.
• Bond Market: The most liquid three-year Korean treasury bond yield rose by 19.6 basis points to 3.426%, reaching its highest level since June 2024. The benchmark 10-year yield also increased by 13.3 basis points to 3.749%.
• Sector Performance: Key index heavyweights, including Samsung Electronics (-10.04%), SK Hynix (-11.58%), and LG Energy Solution (-6.62%), experienced significant declines. Of the total 927 traded issues, only 56 shares advanced, while 869 declined.
• Foreign Investor Activity: Foreigners were net sellers of shares worth 1.8 trillion won.
• Monetary Policy: The Bank of Korea has pledged to take market-stabilising measures, if required, due to excessive volatility in bond and foreign exchange markets.