Geopolitical tensions in the Middle East have led to a surge in international oil prices, triggering a wave of risk aversion in global markets. Following a decline in the New York stock market, South Korea's stock exchanges experienced significant sell-offs, with both the KOSPI and KOSDAQ dropping more than 5%.
On July 24, the Korea Exchange reported that the KOSPI closed at 6,690.02, down 406.87 points (5.73%) from the previous trading day. The index opened at 7,000.78, down 96.11 points (1.35%), and continued to decline throughout the session.
The drop in the New York market was attributed to rising oil prices amid escalating tensions in the Middle East, raising concerns about a resurgence of inflation. Market participants feared that higher oil prices could delay the Federal Reserve's interest rate cuts, leading to increased selling pressure, particularly in technology stocks. This risk-averse sentiment carried over to the domestic market, where foreign investors focused their selling on large-cap stocks, including semiconductors.
In the securities market, foreign investors sold a net 3.2685 trillion won, while institutions sold 1.9513 trillion won. In contrast, individual investors purchased a net 5.1783 trillion won.
As volatility increased early in the session, both markets triggered sell-side circuit breakers. The Korea Exchange halted the effectiveness of sell orders in the securities market for five minutes at 11:23 a.m. A similar circuit breaker was activated in the KOSDAQ at 11:47 a.m.
Among the top market capitalization stocks, SK Square fell 9.17%, Samsung Electro-Mechanics dropped 8.43%, SK Hynix declined 8.34%, Samsung Electronics fell 7.59%, Hyundai Motor decreased 7.18%, LG Energy Solution dropped 5.32%, Samsung C&T fell 5.00%, Samsung Life Insurance decreased 3.49%, and KB Financial Group fell 2.72%. In contrast, Samsung Biologics rose 10.08%, buoyed by strong second-quarter results.
The KOSDAQ closed at 785.00, down 46.23 points (5.56%). The index opened at 816.39, down 14.84 points (1.79%), and continued to decline.
In the KOSDAQ market, foreign and institutional investors sold a net 130.4 billion won and 358.7 billion won, respectively, while individual investors bought a net 488.8 billion won.
Among the top KOSDAQ stocks, Rainbow Robotics fell 16.73%, Juseong Engineering dropped 13.97%, Wonik IPS declined 11.30%, IOTechniques fell 9.13%, PSK dropped 8.73%, EcoPro BM fell 8.29%, EcoPro decreased 7.12%, Rino Industry dropped 7.04%, ABL Bio fell 2.42%, Alteogen decreased 2.28%, and Pharma Research dropped 1.67%. Meanwhile, HLB rose 4.00% amid expectations for FDA approval of its bile duct cancer treatment.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The domestic market retreated as risk appetite waned due to heightened tensions in the Middle East. This week, both the KOSPI and KOSDAQ have experienced extreme volatility, triggering circuit breakers for five consecutive trading days."
* This article has been translated by AI.
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