As the Iran war showed signs of escalating, the KOSPI index plunged 3% on the 30th. As investor sentiment toward risky asset weakened, both domestic stocks and the won fell.
The KOSPI index ended the session at 5,277.30, down 161.57 points (2.97%) from the previous trading day. Early in the session, the KOSPI index crashed more than 5% to as low as 5,151 points, but the intraday decline narrowed and it held the 5,200 level.
In the Korea Exchange's main board, foreigners were net sellers of more than 2 trillion won, and pension funds were also net sellers. In contrast, individuals were net buyers of 900 billion won, and financial investment, which includes exchange-traded funds (ETF), was also a net buyer of 800 billion won.
Over the weekend, news broke that geopolitical risks in the Middle East were expanding. On reports that Israel attacked an Iranian steel mill, U.S. stocks fell across the board, and the Houthi rebels, a pro-Iran Islamic force, said they would take Iran's side and join the war.
The Houthi rebels have a record of attacking oil tankers and other merchant ships at the mouth of the Red Sea, which accounts for 10% of global sea freight. Following the closure of the Strait of Hormuz, concerns that Red Sea freight volumes could also shrink weighed on investor sentiment worldwide.
iM Securities said, "The threat that this war could block not only the Strait of Hormuz but also the crude oil route in the Red Sea acted as upward pressure on oil prices and a factor in the day's index decline," and noted, "Investors need to keep in mind the possibility that concerns about the war's spread could grow."
The won-dollar exchange rate jumped to 1,515 won on the day. As caution grew that the Iran war could hit the global economy, risk-asset aversion increased, and not only Korea's stocks but also its currency value plunged.
Most of the top market-cap stocks on the main board fell. In particular, SK hynix and Hyundai Motor fell more than 5%.
Meanwhile, as oil prices rose, battery stocks such as LG Energy Solution and Samsung SDI gained on expectations that demand for batteries, including in electric vehicles, would increase.
The KOSDAQ index also plunged more than 3%. With both foreigners and institutions net selling, only individuals were net buyers. Most KOSDAQ large caps fell.
However, Sam Chun Dang Pharm, which held its shareholders' meeting that day, surged more than 6%, and Pearl Abyss rose 15% as its new game "Crimson Desert" received a fresh look.