Seoul shares tumble 4 pct on renewed U.S.-Iran tensions; won strengthens

Seoul stocks experienced a significant 4 percent drop on Wednesday, amid heightened tensions between the United States and Iran. The conflict's impact led to a surge in crude prices and heightened inflation concerns. The Korea Composite Stock Price Index (KOSPI) closed at 6,562.72, marking a decline of 273.08 points, or 3.99 percent, following a brief two-session winning streak.

Tensions escalated after the U.S. launched airstrikes targeting Iranian sites near the Strait of Hormuz, resulting in higher oil prices and renewed inflation worries. The Federal Reserve's upcoming meeting, where a potential rate hike was on the agenda, further bolstered the odds against the U.S. currency, pushing the Korean won to strengthen against the dollar.

Market participants witnessed a net outflow of 1.9 trillion won from foreign investors and 2 trillion won from institutional investors, while domestic investors managed to buy back 2.3 trillion won worth of shares. Notable declines were seen in major companies such as Samsung Electronics, SK hynix, Hyundai Motor, and Kia, with several battery makers and internet giants also experiencing losses. The Korean won experienced a 1.7 won increase, trading at 1,368.7 won per U.S. dollar.