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Kospi plummets 5.57% over U.S. tariff uncertainty

Published: 07 Apr. 2025, 16:56 Updated: 07 Apr. 2025, 20:06

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,328.2 points on April 7, down 137.22 points, or 5.57 percent, from the previous trading session. [YONHAP]

Shares nose-dived more than 5.5 percent Monday, extending their losing streak to a fourth consecutive day, as investors panicked over escalating global trade war concerns triggered by U.S. reciprocal tariffs. The won's value fell by the most against the dollar since the Covid-19 pandemic.

The Kospi shed 137.22 points, or 5.57 percent, to close at 2,328.2. The tech-laden Kosdaq also dipped 5.8 percent.

Shortly after the stock market opened, the bourse operator issued the first sidecar order since August 2024, halting program purchasing for five minutes, after the Kospi 200 index shed over 5 percent for more than 1 minute.

Trade volume was a bit heavy at 615.2 million shares worth 10.5 trillion won ($7.16 billion), with losers far outnumbering winners 862 to 68.

Foreigners dumped 2.09 trillion won worth of local shares, while retail investors and institutions purchased 1.67 trillion won and 253.2 billion won, respectively.

The Kospi tanked as investors dumped stocks amid growing fears of a recession following the Donald Trump administration's announcement of "reciprocal" tariffs last week, prompting China to fire back with 34 percent tariffs on U.S. goods and export controls on rare earths while threatening additional steps in the near future.

"Volatility in the Korean stock markets heightened on the Trump administration's stronger-than-expected tariff policies," Park Seok-joong, an analyst at Shinhan Securities, said.

"None of the Korean export industries will be able to evade the influence of the U.S. tariff scheme," Park said.

Wall Street saw its worst week since the Covid-19 pandemic last week, with the S&P 500 plunging 6 percent Friday, while the Dow Jones Industrial Average plummeted 5.5 percent and the tech-heavy Nasdaq composite lost 5.8 percent.

In Seoul, many big-cap shares slid to hit their lowest mark in a year.

Samsung Electronics slid 5.17 percent to 53,200 won, and chipmaking rival SK hynix shot down 9.55 percent to 164,800 won.

Top carmaker Hyundai Motor sank 6.62 percent to 179,100 won, and defense firm Hanwha Aerospace plunged 8.55 percent to 642,000 won.

Leading shipbuilders Hanwha Ocean and HD Hyundai Heavy plummeted 9.81 percent and 8.17 percent to 62,500 won and 275,500 won, respectively.

Bio company Samsung Biologics lost 5.71 percent to 1.01 million won, and steel giant Posco Holdings slumped 6.59 percent to 255,000 won.

Financial shares also slid sharply, with KB Financial dipping 6.95 percent to 72,300 won and Meritz Financial losing 5.66 percent to 111,700 won.

The local currency was quoted at 1,467.8 won against the dollar at 3:30 p.m., up 33.7 won from the previous session.

It marked the steepest single-day loss since March 19, 2020, when the currency weakened by 40 won amid the Covid-19 pandemic.

Bond prices, which move inversely to yields, ended higher. The yield on three-year government bonds fell 5.7 basis points to 2.41 percent, and the return on the benchmark 10-year U.S. government bonds dropped 2.4 basis points to 4.01 percent.

Yonhap