April 18, 2024

• 

(Yonhap)

South Korea’s benchmark Kospi fell some 2 percent on Monday, with market behemoth Samsung Electronics dropping below the 70,000 won-mark ($57.03) at one point, rattled by the escalating war in Ukraine and surging oil prices.

The value of the Korean won weakened against the US greenback, with the local currency surpassing the 1,220 won-mark against the dollar for the first time since June 2, 2020. It closed 12.9 won higher against the dollar from the previous session at 1,227.1 won.

The main bourse Kospi closed 2.29 percent down from the previous session at 2,651.31.

The losses were driven by the growing geopolitical risks stemming from the Russian war in Ukraine, including the effects of the sanctions imposed on Moscow by the US and its allies. Oil prices have surged as oil buyers have been considering banning barrels from Russia, the world’s second-largest exporter of crude. West Texas Intermediate crude futures, the US oil benchmark, traded 7.68 percent higher to $124.56 per barrel, as of Sunday (Eastern Standard Time). It hit $130 per barrel at one point.

Wall Street on Friday saw its own plunge due to the risks, with the Dow Jones Industrial Average falling 0.5 percent to notch its fourth consecutive losing week. The S&P 500 shed 0.7 percent, while the Nasdaq Composite fell 1.6 percent.

“The local stock market has been under pressure with the US stocks continuing to be bearish due to the geopolitical risks stemming from Ukraine,” Mirae Asset Securities Analyst Park Gwang-nam said.

“The Korean stocks are likely to further plummet considering the existing risks and with the weakening value of won, it is unlikely to attract more foreigners,” he added.

Foreigners offloaded shares worth a net 1.17 trillion won and institutions sold a net 960 billion won. Retail investors, meanwhile, bought a net 2.1 trillion won.

Market behemoth Samsung Electronics shed 1.96 percent to 70,100 won, and No. 2 chipmaker SK hynix fell 4.02 percent to 119,500 won.

Internet portal operator Naver shed 3.31 percent to 307,000 won, and top carmaker Hyundai Motor dropped 2.61 percent to 168,000 won.

The secondary, tech-heavy bourse Kosdaq also shed 2 percent from the previous closing, to close at 881.54.

On the trend toward a strong dollar driven by the Ukraine crisis, experts said that the local currency could weaken to 1,250 won against the greenback.

“With the prolonged Ukraine crisis, the strong dollar trend and the weak won trend is inevitable, and is likely to push up the local currency to 1,250 won against the US greenback,” said Kwon Ah-min, an analyst from NH Investment & Securities.

By Jung Min-kyung (mkjung@heraldcorp.com)