South Korean shares tumble over 1% as Middle East tensions rise
Escalating conflict in the Middle East triggered a risk-off mood, pulling South Korea's KOSPI down 1.37% and prompting foreign investors to sell billions of won worth of equities.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Rising Middle East risk could push oil prices higher and increase market volatility, prompting a cautious stance on risk‑sensitive PSX sectors.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- Oil & GasNegatively affected
- MarketsNegatively affected
- EconomyNegatively affected
Companies Mentioned
No listed ticker was flagged. Watch the sectors above for direction.
Mentions in This Briefing
Sectors: Oil & Gas, Markets, Economy — Negative · Do not buy. Rising Middle East risk could push oil prices higher and increase market volatility, prompting a cautious stance on risk‑sensitive PSX sectors.
Full Story
Open on Business Recorder## Market Overview
On Thursday, South Korean equities slipped more than 1% amid heightened geopolitical risk stemming from the Middle East. The benchmark KOSPI index fell 96.61 points, or 1.37%, closing at 6,955.03 as of 00:58 GMT.
## Drivers of the Decline
Iran announced on Wednesday that it had attacked ten vessels near the Strait of Hormuz following a U.S. operation that sank five Iranian oil tankers – the most intense exchange of attacks on shipping since the war began six months ago. The escalation dampened global risk appetite, leading investors to pull back from equities.
## Sectoral Impact in South Korea
- Technology: Samsung Electronics dropped 1.67% and SK Hynix slipped 1.35%. - Automobile: Hyundai Motor fell 0.77% while Kia Corp lost 0.39%. - Battery: LG Energy Solution slid 0.81%. - Steel: POSCO Holdings declined 0.30%. - Pharma: Samsung BioLogics fell 1.72%.
Out of 906 traded stocks, 197 advanced and 666 declined.
## Foreign Investor Activity
Foreign investors were net sellers, disposing of shares worth 219.3 billion won (approximately $163.9 million).
## Currency and Bond Markets
The Korean won edged higher against the dollar, quoted at 1,339.3 per USD onshore (up 0.07%) and 1,337.8 offshore (up 0.10%). In the money market, three‑year treasury futures slipped 0.07 point to 102.97, while yields on the most liquid three‑year bond rose 3.0 basis points to 3.936% and the 10‑year benchmark climbed 5.3 basis points to 4.443%.
## Implications for Pakistan
The surge in Middle East tension can lift global oil prices, increase import costs for Pakistan, and heighten overall market risk, which may weigh on the PSX’s risk‑sensitive sectors.