South Korea's financial markets suffered a significant blow, as stocks tumbled over 5.5% on April 7, marking a fourth straight working day of declines, as reported by Yonhap News Agency. Investor sentiment deteriorated sharply following heightened global trade tensions, sparked by newly imposed US tariffs.

The Korea Composite Stock Price Index (KOSPI) dropped 137.22 points to settle at 2,328.20, a fall of 5.57%. The tech-focused KOSDAQ also plunged by 5.8%. The trading day saw the Korea Exchange activate a five-minute suspension on automated trades — the first such action since August 2024 — after the KOSPI 200 index briefly plunged more than 5%.

Turnover reached 615.2mn shares, valued at KRW10.5 trillion (approx. $7.16bn), with a stark imbalance between falling and rising stocks: 862 versus 68. Foreign investors offloaded KRW2.09 trillion in local equities, while retail and institutional buyers absorbed KRW1.67 trillion and KRW253.2bn, respectively.

The downturn followed retaliatory moves by China in response to US tariff hikes, including new duties on American goods and export curbs on rare earth elements. These developments triggered recession fears among global investors.

Seoul’s major firms weren’t spared. Samsung Electronics and SK hynix lost 5.17% and 9.55%, respectively. Hyundai Motor sank 6.62%, while defence and shipbuilding giants also saw sharp losses.

Currency markets also reacted, with the won weakening by 33.7 to 1,467.8 per dollar — its steepest daily fall since March 2020 at the height of the COVID-19 crisis.