The KOSPI opened 1.35% lower at 7,000 points on Friday as Middle East tensions and surging oil prices weighed on investor sentiment [1], [2].
This decline reflects the sensitivity of the South Korean economy to global energy costs and geopolitical stability. As a major importer of energy, South Korea often sees its equity markets react sharply to volatility in the Middle East, which can disrupt supply chains and increase operational costs for domestic industries.
Market analysts said the downward pressure was due to heightened uncertainty between the U.S. and Iran [1], [2]. This instability has contributed to a rise in global oil prices, a trend that also dragged down U.S. equities earlier this week [1], [2].
Despite the weak start, some indicators suggest the market may find a floor. The KOSPI is expected to face intraday pressure that could push the index into the 6,900 to 6,800 point range [1]. However, news from the U.S. semiconductor sector may provide a cushion against further steep declines.
Intel reported an earnings surprise and raised its revenue projections after the U.S. market closed, leading to a gain in the 2% range during after-hours trading [1]. This performance is expected to support semiconductor stocks in Seoul.
"If we consider this, it is analyzed that the decline will be reduced as downward rigidity is created, centered on semiconductors during the market [1]," said YTN reporter Yoon Tae-in.
Yoon also said the continued possibility of expanded capital expenditure by hyperscalers is a factor that could influence the market's recovery [1]. The interplay between geopolitical risk and the strength of the tech sector will likely determine the KOSPI's closing position for the day.
“KOSPI opened 1.35% lower at 7,000 points”
The current volatility in the KOSPI highlights a tug-of-war between macroeconomic risks and sector-specific growth. While geopolitical instability in the Middle East creates a systemic drag through oil prices, the strength of the AI and semiconductor pipeline—evidenced by Intel's performance—acts as a critical hedge. For investors, the primary concern is whether tech-driven optimism can outweigh the tangible costs of a global energy crisis.
