South Korean shares opened lower on Wednesday, tracking losses on Wall Street, amid a sell-off in chip shares, the fastest U.S. inflation since May 2023, and uncertainties in the Middle East war.
The benchmark Korea Composite Stock Price Index, or Kospi, fell by 129.5 points to open at 7,513.65. The Kosdaq declined by 2.85 points to open at 1,176.43.
Mohammad Bagher Ghalibaf, the speaker of Iran's parliament, said Monday that the country's military was ready to "teach a lesson" to any aggressor, after US President Trump rejected Iran's response to the recent peace proposal and said the ceasefire was "on life support."
Trump dismissed Tehran's response as extremely weak, adding that he did not fully read the proposal, called it "garbage," and questioned whether the truce could hold.
Amid uncertainties, the Korean won also weakened against the greenback, opening at 1,493.8 won per dollar, down 3.9 won from Tuesday's close.
In addition, a 3.8% increase in annual US inflation in April impacted sentiment. The higher-than-expected inflation was a result of a jump in the prices of gasoline and groceries last month. The Bureau of Labor Statistics said nearly half of the jump was driven by rising energy costs, with housing and food prices also contributing to the uptick.
Overnight losses in US stocks also led to an erosion in the appetite for South Korean stocks. The Nasdaq Composite led declines, declining about 0.7%, while the S&P 500 slipped over 0.1%. On the other hand, the Dow Jones Industrial Average edged up 0.1%, supported by its lower exposure to technology stocks.