KOSPI triggers trading curb
Won hits weakest since March 2009
Benchmark bond yield hits highest in over 2 years
SEOUL, March 23 (Reuters) - South Korean shares tumbled on Monday on heightening geopolitical conflict in the Middle East, with the won hitting 17-year lows.
U.S. President Donald Trump and Iran threatened to escalate their war by attacking energy facilities in the Gulf, a potential widening of hostilities which could deepen a regional crisis and add to concerns in global markets.
The benchmark KOSPI .KS11 fell 289.24 points, or 5%, to 5,491.96 as of 0131 GMT, extending losses even after a trading curb was activated on the index earlier in the session.
The won KRW=KFTC weakened 0.3% to 1,509.4 per dollar on the onshore settlement platform KRW=KFTC, hitting its lowest level since March 2009.
"Hopes are fading that the war will end soon," said Huh Jae-hwan, an analyst at Eugene Investment & Securities.
"We don't have to be too pessimistic because Asian countries are in a stronger position than before thanks to robust tech sectors, while the government is also planning an extra budget. However, the market's patience has become weak," Huh said.
Budget Minister nominee Park Hong-keun said on Monday the government would draft a supplementary budget as soon as possible, a day after the government and the ruling party agreed on extra spending of around 25 trillion won ($16.58 billion) to support those hit by surging oil prices.
Shin Hyun-song, who was named on Sunday to head the Bank of Korea, said he would seek a "balanced" policy with inflation, growth and financial stability under consideration, as market volatility and economic uncertainty heightened after the Iran war.
In the stock market, only 74 advanced among 926 traded issues, while 834 declined. Among index heavyweights, chipmaker Samsung Electronics 005930.KS fell 4.81% and peer SK Hynix 000660.KS lost 6.06%, while battery makers and automakers also dropped.
Foreigners sold local shares worth 1.8 trillion won, leading the losses on the index, while institutional investors were also net sellers.
The KOSPI, which had been on a world-beating, artificial intelligence-driven rally until before the war broke out, has fallen 12% so far this month. It is still up 30% this year to date.
The country's benchmark 10-year yield KR10YT=RR jumped by 14.4 basis points to 3.802%, the highest since November 2023.
($1 = 1,508.1000 won)
(Reporting by Jihoon Lee; Editing by Mrigank Dhaniwala)
((jihoon.lee@thomsonreuters.com;))
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