Amid signs of an escalating U.S.-Iran war and the nomination of a hawkish candidate for Bank of Korea governor, the KOSPI index was plunging more than 5% on the morning of the 23rd. The KOSDAQ index was also down 4%.
As of 12 p.m. that day, the KOSPI index was down 316.04 points (5.47%) from the previous trading day at 5,465.16. The KOSPI opened that day at 5,580.15, down 201.05 points (3.48%) from the previous trading day, and then widened its losses. A sell-sidecar was triggered at one point during the morning session.
The main board is being dragged down by foreigners and institutions. Foreigners and institutions were net sellers of 2.4896 trillion won and 2.4185 trillion won, respectively. Individuals were net buyers of 4.6409 trillion won, defending the market.
Top market-cap stocks on the main board were all falling. Samsung Electronics and SK hynix were down in the 5% and 6% ranges, respectively, and Hyundai Motor, LG Energy Solution, SK Square, Samsung Biologics, Doosan Enerbility, Hanwha Aerospace, and Kia were also declining.
At the same time, the KOSDAQ index was at 1,112.08, down 49.44 points (4.26%) from the previous day.
Individuals were also defending the KOSDAQ market. While individuals were net buyers of 384.7 billion won, foreigners and institutions were net sellers of 288.8 billion won and 92.6 billion won, respectively.
Among top KOSDAQ market-cap stocks, most were falling, with only Sam Chun Dang Pharm up in the 3% range. EcoPro, EcoPro BM, Alteogen, Rainbow Robotics, ABL Bio, LEENO Industrial, Peptron, Kolon TissueGene, and LigaChem Biosciences were declining.
With Middle East tensions peaking over the U.S.-Iran war, Korea's stock market also took a hit. Earlier, U.S. President Trump warned on the 21st (local time), "If Iran does not fully open the Strait of Hormuz within 48 hours, we will wipe out Iran's power plants without a trace."
In response, Iranian Spokesperson Ebrahim Zolfaghari said, "If the U.S. threat targeting Iran's power plants is carried out, the Strait of Hormuz will be completely closed and will not reopen until the power plants are rebuilt."
The nomination of a hawkish figure as the candidate for the new Bank of Korea governor also appeared to have an impact. President Lee Jae-myung the previous day (on the 22nd) nominated Shin Hyun-song, head of the monetary and economic department at the Bank for International Settlements (BIS), as the new Bank of Korea governor candidate.
The industry views the nominee as hawkish. Kim Ji-na, a researcher at Eugene Investment & Securities, said, "There is a focus on financial stability and wariness about an asset bubble," adding, "So naturally, risk awareness about inflation is also relatively high."