Stocks open lower Monday as investors brace for Silicon Valley Bank fallout

A screen in Hana Bank's trading room in central Seoul shows stock and foreign exchange markets open on Monday. [NEWS1]

Stocks opened slightly lower Monday, as investors brace for the fallout from the Silicon Valley Bank's collapse amid woes over the Federal Reserve's monetary tightening.

The benchmark Kospi shed 13.71 points, or 0.57 percent, to 2,380.88 points in the first 40 minutes of trading. The Kosdaq shed 12.75, or 1.72 percent, to 775.85.

The market got off to a lackluster start after the Dow Jones Industrial Average closed down 1.07 percent Friday, with the tech-laden Nasdaq Composite declining 1.76 percent.

Last week, U.S.-based Silicon Valley Bank collapsed in the wake of the Fed's aggressive rate hikes, affecting other lenders and the financial market, raising concerns over the weekend on potential bank runs around the world on Monday.

The U.S. Treasury Secretary Janet Yellen and the Fed announced Monday morning shortly before the Korean market opened on their plans to shore up programs to protect the bank customers and prevent damage to the overall financial system.

Yellen had ruled out bailout for Silicon Valley Bank earlier Sunday, saying that the "American Banking system is really safe and well-capitalized," but announced later in the day that the government would ensure all depositors of Silicon Valley Bank would be paid back in full.

But as this measure is limited to deposits, the impact is still expected to hit Seoul's National Pension Service (NPS), which owns some 100,000 Silicon Valley Bank stocks valued at around $23.2 million as of late last year.

In Seoul, top cap Samsung Electronics grew 0.17 percent, while chipmaker SK hynix shed 0.12 percent.

Battery maker LG energy Solutions gained 0.54 percent, and chemical firm LG Chem lost 0.14 percent. Carmaker Hyundai Motor decreased 0.11 percent.

The local currency was changing hands at 1,314.7 won against the dollar as of 9:55 a.m., down. 8.3 won from the previous session's close.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]