Shares of major Korean companies plunged in premarket trading as the United States continued airstrikes on Iran for a second consecutive day and tensions in the Middle East escalated. With New York stocks also closing lower overnight, analysts raised the possibility that Korean markets could see a second straight day of declines.
According to alternative trading system Nextrade (NXT), Samsung Electronics (005930.KS) was trading at 285,500 won as of 8:02 a.m. Wednesday, down 5.62% from the previous session. SK hynix (000660.KS) was trading at 1.922 million won, down 6.15%. Other top market-cap stocks were also mostly weak, including SK Square (-4.90%) and Samsung Electro-Mechanics (-8.09%).
The decline in major companies' shares is attributed to renewed tensions in the Middle East. U.S. forces carried out bombing targeting major military facilities in Iran in retaliation for the downing of an Apache helicopter, and Iran responded by firing missiles at U.S. bases across the Middle East, escalating military tensions in the region. U.S. President Donald Trump said Tuesday, "We hit Iran hard yesterday. Today we will strike Iran again even harder." In response, Iranian President Masoud Pezeshkian declared, "Based on national unity and solidarity, we will stand firm against any pressure or threat."
New York stocks all closed lower overnight as profit-taking flooded artificial intelligence (AI) chip and tech stocks. The Dow Jones Industrial Average ended at 49,918.78, down 953.33 points (1.87%) from the previous session, while the Standard & Poor's 500 index fell 1.62%. The tech-heavy Nasdaq Composite closed at 25,169.50, down 509.32 points (1.98%). AI leader Nvidia fell 3.4% and Micron Technology dropped 4.7%, with semiconductor and AI-related stocks falling sharply.
Han Ji-young, an analyst at Kiwoom Securities, said, "Korean markets are expected to open lower today due to internal and external uncertainties, including news of U.S. airstrikes on Iran. Volatility has risen to the point where sidecars have been triggered for four consecutive trading days."
