SEOUL, KOREA - On August 8, the KOSPI market was hit by news of air strikes against Sunni fundamentalist fighters in Iraq. The KOSPI index closed at 2,031.10 on the 8th, down 1.14 percent (23.41 points) from the previous day.

 

Overnight, the U.S. stock markets closed lower on geopolitical worries including the escalating tensions between Russia and the West over the Ukraine issue and the impending humanitarian intervention in parts of Iraq under the hold of Islamic State fighters.

 

As soon as the market opened in the morning of August 8, KOSPI fell below the 2,050 level. The news of U.S. President Barack Obama authorizing air strikes in northern Iraq to avert "genocide" of the Yazidis, a religious minority group besieged by Islamic State fighters, further accelerated the slide of the KOSPI index close to the 2,030 line. In the end, the index closed at 2,031.10, down for four consecutive trading days.

 

As a result, the share prices of construction contractors involved in Iraq's postwar reconstruction projects fell by a large margin. For example, Hanwha saw its share price decline 4.63 percent, while Daewoo Engineering & Construction (-5.48%), Daelim Industrial (-1.76%), GS Engineering & Construction (-2.92%) all turning south. In contrast, oil refining shares such as SK Innovation (1.49%), S-Oil (1.12%), and GS Oil (0.76%) rose for the day on expectations that oil prices would rise once another war breaks out in the Middle East.