South Korean shares plunge to 17-month low as US tariff worries dominate

SEOUL: South Korean shares plunged on Monday to their lowest level in more than 17 months, activating a trading curb, as US tariff worries strike global financial markets.

The benchmark KOSPI was down 113.43 points, or 4.60%, at 2,351.99 as of 0239 GMT, after falling as much as 5.6% to its lowest level since November 1, 2023.

A sidecar trading curb was activated on the KOSPI soon after the market opened, halting programme trading for five minutes, for the first time since August 5, 2024.

Elsewhere in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 3%, as Hong Kong and Taiwanese markets dropped more than 9% and China’s shed over 5%.

Japan’s Nikkei declined more than 6%, as US stock futures extended losses after Wall Street’s heavy two-day sell-off as US President Donald Trump’s reciprocal tariffs stoke recession fears.

South Korea will prepare support measures for sectors with urgent needs, the finance minister said on Monday, ahead of Trump’s 25% tariff, which is planned to be imposed on imports from the United States’ Asian ally starting Wednesday.

The country’s financial regulator said it would be prepared to activate its 100 trillion-won ($68.17 billion) market stabilising programme, while the central bank also vowed to stabilise markets.

“Volatility will continue to remain elevated as Trump’s tariffs and retaliatory measures from other countries are adversely affecting corporate earnings,” said Seo Sang-young, an analyst at Mirae Asset Securities.

Among South Korean heavyweights, chipmaker Samsung Electronics fell 4.28% and peer SK Hynix lost 7.19%, set for their biggest drops in more than four months and two months, respectively.

Hyundai Motor shed 4.95%, marking its biggest drop since late October and the lowest in 15 months, and sister automaker Kia Corp lost 4.01%.

Battery makers, steel manufacturers and biopharmaceutical companies also fell sharply.

Foreigners were net sellers of shares worth 1.17 trillion won, extending their sell-off to a seventh straight session.

South Korean shares track Wall Street lower, but set for weekly gain

The won was quoted at 1,468.2 per dollar, down 0.5% from the previous close and 2.6% from a five-week high hit on Friday when a court ruling upholding the impeachment of President Yoon Suk Yeol reduced political risk.

On Monday, the spread on five-year credit default swaps widened to 49.83 points, sharply up from 40.84 on Friday, the highest since January 2023 and the biggest jump since March 2020. Such swaps offer insurance against the risk of default.

The most liquid three-year Korean treasury bond yield fell by 4.8 basis points to 2.426% and the benchmark 10-year yield fell by 7.2 basis points to 2.668%, hitting their lowest since March 2022 and December 2024, respectively.