Seoul shares crash over 6 pct on escalating U.S.-Iran conflict

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Seoul shares crash over 6 pct on escalating U.S.-Iran conflict

SEOUL, March 23 (Yonhap) -- South Korean stocks plummeted over 6 percent Monday, as the Middle East crisis does not show signs of easing amid an extended standoff between the United States and Iran over the Strait of Hormuz. The Korean won sharply fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 375.45 points, or 6.49 percent, to 5,405.75.

The index had experienced extreme volatility since the outbreak of the Iran war, falling by more than 12 percent on March 4, before a sharp rebound in the next session, only to fall again by more than 5 percent the following week.

The KOSPI opened sharply lower, triggering the country's main bourse operator to temporarily halt program trading for five minutes.

It marked the sixth sell-side sidecar issued this year, according to the Korea Exchange.

"Offshore and institutional investors unloaded large-cap shares, amid a triple burden of high oil prices, U.S. rate uncertainties and geopolitical tensions," Lee Kyoung-min, an analyst at Daishin Securities, said.

Tensions are escalating between Iran and the U.S. after President Trump gave Tehran 48 hours to reopen the Hormuz Strait, or face the destruction of its energy infrastructure.

In return, Iran warned it could "indefinitely" close the strait, if Trump acted on his threat.

Growing Middle East tensions, coupled with waning expectations for the Federal Reserve to cut rates soon, added further selling pressure on large-cap shares in chips, defense and finance, key sectors that have led the bull market, Lee added.

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