South Korean Shares Fall on Middle East Risks

The benchmark KOSPI fell more than 3% to around 6,685 on Monday, extending losses for a third straight session amid escalating Middle East tensions. Oil prices climbed above $100 a barrel as a vessel was struck in the Strait of Hormuz and Saudi Arabia shut its East-West crude pipeline following drone attacks, fueling concerns over further supply disruptions and higher energy costs for South Korea. Additionally, renewed concerns over the sustainability of the AI investment cycle weighed on semiconductor shares, with SK hynix falling more than 6% and Samsung Electronics down nearly 4%. SK Group Chairman Chey Tae-won also warned that heavy AI investment could become a bubble if capital and resources fail to generate sufficient returns. Other notable decliners included SK Square (-7.1%), Hyundai Motor (-3.5%), Doosan Enerbility (-3.1%), Kia Corporation (-2.8%), and Hyundai Mobis (-4.2%).