Seoul's benchmark Korea Composite Stock Price Index (KOSPI) plunged 150.98 points, or 2.28 percent, to 6,474.95 as of 9:15 am local time on Monday, 13 October 2025, as technology stocks led a broad sell-off driven by elevated oil prices and deepening Middle East tensions. The index had opened 0.72 percent lower before accelerating its decline through the morning session.

What Drove the Sell-Off

Renewed Houthi attacks on Saudi Arabia's main airport over the weekend stoked fears of a broader regional conflict that could disrupt global energy supplies. Oil prices rose in response, reviving inflation concerns and raising the prospect of additional US Federal Reserve interest rate hikes — a combination that typically pressures rate-sensitive equity markets, particularly in export-dependent economies like South Korea.

Notably, the decline came despite a positive session on Wall Street on Friday, where the Dow Jones Industrial Average rose 0.83 percent and the tech-heavy Nasdaq Composite climbed 0.64 percent, underscoring that the Seoul sell-off was driven primarily by geopolitical and commodity risk rather than global equity weakness.

Tech Giants Take the Hardest Hit

Technology heavyweights bore the brunt of the selling. Samsung Electronics fell 2 percent, while rival chipmaker SK hynix declined 2.86 percent. Defence conglomerate Hanwha Aerospace dropped 2.58 percent, and leading shipbuilder HD Hyundai Heavy Industries plunged 3.91 percent.

Not all counters were in the red. Second-ranked automaker Kia edged up 0.94 percent, while shipping firm HMM surged 5.29 percent — possibly benefiting from expectations of tighter freight capacity if Middle East shipping lanes face further disruption.

Foreign Investors Drive Net Outflows

Foreigners sold a net 699.27 billion won (approximately US$524 million) worth of stocks during the session. Domestic institutions and individual investors partially absorbed the outflow, buying a net 3.25 billion won and 441.74 billion won, respectively. The Korean won was trading at 1,335.35 won against the US dollar as of 11:20 am, up 6.65 won from the previous session's close.

Securities Settlements Also Slide

Separately, industry data released on Monday showed that the daily volume of securities settlements in South Korea's financial market contracted sharply in the third quarter. The Korea Securities Depository (KSD) reported an average of 35.4 trillion won (approximately US$26.5 billion) handled per day during July–September, down 16.5 percent from the previous quarter. Daily stock exchange turnover fell 12.4 percent on-quarter to 8.8 trillion won, while bond market daily volumes dropped 17.7 percent to 26.6 trillion won.

The settlement data adds a further layer of caution to the market outlook, suggesting that overall trading activity was already losing momentum even before Monday's geopolitics-driven sell-off.