KOSPI falls 1.76% below 7,000 as oil and interest rates rise

  • KOSPI fell 1.76% as prolonged Middle East conflict weakened South Korean equities.
  • 6,909.91 was the KOSPI's closing level on the 11th, below 7,000.
  • Samsung Electronics dropped 3.53%, while semiconductor equipment shares fell sharply.

South Korea's KOSPI fell 1.76% to 6,909.91 on the 11th, closing below 7,000 for the first time in three sessions as prolonged Middle East conflict pushed oil prices and interest rates higher. The index opened down 3.29% before reducing its losses, while the KOSDAQ declined 1.95% to 820.64. Samsung Electronics fell 3.53%, and most other large-cap shares also weakened. Energy-market pressures intensified after Yemen's Iran-aligned Houthi rebels seized parts of the Bab el-Mandeb Strait, while disruptions through the Strait of Hormuz continued, tightening global energy supply routes on both sides of the region. October-delivery West Texas Intermediate crude futures rose 6.69% overnight to $102.48 a barrel. The European Central Bank raised each of its three key policy rates by 0.25 percentage point on the 10th, while markets saw a high chance that the U.S. Federal Reserve would raise rates at this month's Federal Open Market Committee meeting to contain inflation. The 10-year U.S. Treasury yield rose above 4.95%, its highest level since October 2023. Semiconductor equipment stocks, which had rallied on expectations of an artificial intelligence-driven boom, suffered especially sharp declines as volatile shares bore the brunt of the deteriorating domestic and external environment.

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