Asia-Pacific Stocks Generally Under Pressure Today, Strait of Hormuz Conflict Rekindles, Kospi Slumps Over 6%

Tradingkey - Amid the meeting between the leaders of China and the U.S., renewed conflict in the Strait of Hormuz has put widespread pressure on Asia-Pacific stock markets, with the KOSPI plunging over 6%.

Latest reports show that India's Ministry of External Affairs stated on May 14 that an Indian commercial vessel was attacked off the coast of Oman near the Strait of Hormuz. On the same day, Iranian Foreign Minister Araghchi stated that there is no military solution regarding Iran and that the Iranian people will never succumb to any threats or pressure.

The KOSPI once surged past 8,000 points in early trading today to hit a record high, reaching an intraday peak of 8,046.78 points. It subsequently weakened amid volatility, at one point falling over 7%, and closed down 6.12% at 7,493.18 points.

The "Recent Economic Trends" report released today by South Korea's Ministry of Economy and Finance shows that while the South Korean economy is showing signs of recovery, the ongoing conflict in the Middle East poses downside risks. The Ministry's analysis suggests that while the global economy maintains a steady growth trend, volatility in international financial markets and energy prices has intensified due to the Middle East conflict. The likelihood of future supply chain instability, increased inflationary pressure, and slowing economic growth has risen.

Among heavyweights, Samsung Electronics fell 8.61% to 270,500 KRW, with a trading volume of 37.93 million shares.

According to a Reuters report, the Samsung Electronics union stated on Friday that it would proceed with its strike scheduled for next week, even after the company proposed an unconditional resumption of wage negotiations. Analysts believe the share price decline stems from growing market uncertainty over the potential impact of the strike on production, as well as concerns about Samsung Electronics' ability to fulfill customer commitments.

JPMorgan Chase estimates that the strike will reduce Samsung's operating profit by 21 trillion to 31 trillion KRW ($14.08 billion to $20.79 billion), while revenue losses could reach approximately 4.5 trillion KRW.

Dragged down by the drop in Samsung's share price, SK Hynix closed 7.66% lower today at 1,819,000 KRW, with a trading volume of 6.92 million shares.

The Nikkei 225 mirrored the movement of the KOSPI, reversing gains to close down 1.99% at 61,409.29 points, after hitting a high of 63,235.77 points and a low of 60,937.3 points.

Kazushige Kamiyama, an executive director at the Bank of Japan, noted in a speech draft that investment funds play a key role in providing risk capital but may also pose potential risks to a country's financial system. Kamiyama stated, "Sudden shifts in global hedge fund capital flows could exacerbate price volatility in the bond and equity markets."

Among heavyweights, Sony rose 3.83%, Hitachi gained 3.02%, and Toyota Motor added 2.56%; Advantest fell 7.88%, and Kioxia dropped 8.27%.

In individual stock news, Kioxia announced plans today to list in the United States. The company stated it expects operating profit for the quarter ending in June to reach 1.3 trillion JPY (approximately $8.2 billion), exceeding the average analyst estimate. Furthermore, the company achieved a record profit of 596.8 billion JPY in the quarter ending in March, also surpassing market expectations.

The Taiwan Weighted Index also closed down 1.39% at 41,172.36 points. Within the index, TSMC rose slightly by 0.44% today to 2,280 TWD.

Presentation materials released by TSMC ahead of a technical symposium show that the company expects the global semiconductor market to exceed $1.5 trillion by 2030, a figure that surpasses its previous forecast of $1 trillion. According to TSMC's projections, within that $1.5 trillion market, the Artificial Intelligence (AI) and High-Performance Computing (HPC) sectors are expected to account for a 55% share; followed by smartphones at 20%; and automotive applications at 10%. TSMC stated that it is accelerating capacity expansion for 2025 and 2026, with plans to build nine new wafer fabs and advanced packaging facilities by 2026.