Shares of Samsung Electronics and SK hynix dropped over 5% amid fears that escalating Middle East tensions and rising oil prices could fuel inflation. Foreign investors were net sellers, while Samsung E&A bucked the trend, rising on positive news.
Shares of South Korean electronics major Samsung Electronics declined more than 5 per cent during early trading on Monday amid rising concerns over higher energy prices and escalating tensions in the Middle East.
According to a news report by Pulse, the English service of Maeil Business News Korea, Samsung Electronics shares fell sharply as investor sentiment weakened due to fears that rising oil prices could fuel inflation and keep interest rates elevated.
Shares of Samsung Electronics were trading 4.81 per cent lower at 189,800 won (USD 125.7) as of 9:12 a.m. on Monday, after dropping as much as 5.32 per cent earlier in the session.
Shares of SK hynix Inc. also came under pressure, trading at 949,000 won (approximately USD 628) down 5.76 per cent.
Geopolitical Tensions and Inflation Fears Fuel Sell-off
The decline comes amid escalating geopolitical tensions involving Iran, the United States and Israel, which have raised concerns about potential disruptions in global energy supply.
Higher oil prices are expected to increase inflationary pressures and weigh on growth-oriented sectors such as semiconductors.
Investor concerns were further heightened after US President Donald Trump warned that Washington would "hit and obliterate" Iran's infrastructure if Tehran does not reopen the Strait of Hormuz within 48 hours.
Adding to the uncertainty, US Federal Reserve Governor Christopher Waller indicated a more cautious stance on monetary policy, citing inflation risks from rising oil prices.
Investor Sentiment and Market Activity
The Pulse report also noted that foreign and institutional investors were net sellers on the Kospi, offloading 624.5 billion won (approximately USD 413 million) and 414.5 billion won (approximately USD 274 million), respectively.
In contrast, retail investors were net buyers, purchasing shares worth 1.02 trillion won (approximately USD 674 million).
Samsung E&A Bucks the Trend
Despite the broader market weakness, shares of Samsung E&A Co. (formerly known as Samsung Engineering) rose during the session.
The stock was trading at 37,950 won (approximately USD 25.1) as of 9:09 a.m., up 7.51 per cent.
The gains in Samsung E&A were driven by expectations of large-scale orders and improved shareholder returns.
After market hours on Friday, the company announced a corporate value enhancement plan, including raising its 2025 dividend payout ratio to 25.1 per cent and introducing a three-year shareholder return policy.
The company had also recently secured a USD 2.4 billion petrochemical plant contract from an overseas client, equivalent to nearly 30 per cent of its annual order target of 12 trillion won.
(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)