KOSPI Today: Index Falls Below 7,000 as Oil Above $100 Revives Inflation Fears

South Korean equities reversed sharply on Thursday, dragging the KOSPI below the 7,000 mark just one session after the index reclaimed the level for the first time in more than a month. The KOSPI today came under pressure as Brent crude held above $100 a barrel, reviving concerns that higher energy costs could keep inflation elevated across import-dependent economies.

The benchmark index was trading 1.28% lower at 6,961.23 by late morning in Seoul. Samsung Electronics declined 1.3%, SK Hynix eased 0.59%, Hyundai Motor slid 1.55% and LG Energy Solution fell 2.83%.

Foreign investors were net sellers of 496.4 billion won worth of shares, while institutional investors offloaded more than 1 trillion won. Retail investors were net buyers.

KOSPI Today: Why South Korean Stocks Are Falling

South Korea's heavy reliance on imported crude and natural gas leaves its economy and stock market particularly sensitive to swings in energy prices. Brent crude rose above $101 a barrel following a fresh escalation in Middle East tensions, stoking concerns that higher fuel costs could feed through into transport, manufacturing and household prices.

Brent had settled at $101.21 a barrel on Wednesday, while WTI ended the session at $96.05.

The selloff was not confined to energy-sensitive stocks. Technology shares also came under pressure, despite having driven Wednesday's rally that pushed the KOSPI to a close of 7,051.64 on expectations of strong AI and memory-chip demand.

An analyst at a Seoul-based brokerage said Korean equities could give back part of Wednesday's gains as higher oil prices and elevated US Treasury yields weigh on sentiment. However, ongoing share buybacks by Samsung Electronics and SK Hynix, along with foreign investors turning net buyers this month, could provide some support.

KOSPI Today: Quadruple Witching Adds to Market Volatility

Thursday also marked a quadruple-witching session in Seoul, with index futures, index options, single-stock futures and single-stock options expiring simultaneously.

The expiry added to volatility in programme trading and foreign futures flows. The KOSPI briefly turned positive after opening 0.18% lower before selling pressure intensified through the morning.

The move came just a day after the index reclaimed the psychologically important 7,000 level. Retail investors had sold a combined 16.84 trillion won over the five sessions through Wednesday, while institutions, foreign investors and corporate treasury-share purchases absorbed much of that supply.

The focus now shifts to whether 7,000 turns into resistance or whether expectations of strong semiconductor earnings bring buyers back into the market.

Asian Stocks Today: Nikkei, KOSPI Fall as Bond Yields Stay High

The weakness extended across the region. The MSCI Asia-Pacific index slipped about 0.4%, while Japan's Nikkei 225 fell 0.6% to 64,759.80. Australian equities also retreated as higher energy costs weighed on risk appetite.

Bond markets added to the pressure. The US 10-year Treasury yield held near 4.84% after a $6 billion Treasury buyback of longer-dated debt fell short of what some investors had expected.

Market expectations had reportedly been closer to a $7 billion-$8 billion buyback, leaving the announced amount below the level some bond investors had anticipated.

US Inflation Data in Focus After KOSPI Falls

Investors are now turning to US producer price data due on Thursday, followed by consumer price inflation figures on Friday.

The data will offer fresh clues on the persistence of inflation and the potential impact of higher energy prices. A stronger-than-expected inflation reading could add to pressure on bond yields and weigh further on risk-sensitive Asian equities.

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