Seoul: South Korean stocks ended a four-day winning streak on Thursday as shares related to artificial intelligence (AI) paused their recent rally and renewed tensions between the United States and Iran impacted market sentiment. The Korea Composite Stock Price Index (KOSPI) declined by 43.41 points, or 0.53 percent, closing at 8,185.29 after dipping as low as 7,841.01.
According to Yonhap News Agency, trade volume was notably heavy, with 664.5 million shares worth 52.1 trillion won (approximately US$34.7 billion) changing hands. The market saw losers outnumbering winners at a ratio of 676 to 213. Foreign investors and institutions offloaded local shares worth 2.9 trillion won and 889.5 billion won, respectively, while retail investors purchased a net 3.6 trillion won.
The index had reached a historic high of 8,288.7 on Wednesday, driven by a robust rally in major semiconductor shares, including industry giants Samsung Electronics and SK hynix. The KOSPI's recent momentum was fueled by hopes of easing geopolitical risks in the Middle East and strong tech sector performance.
However, news of the U.S. conducting military strikes on an Iranian site dampened expectations for a swift peace deal between the two countries. Iran's retaliatory strikes on a U.S. air base also contributed to a rise in global oil prices, further affecting market stability.
Overnight, U.S. stock indexes achieved record highs, with the Dow Jones Industrial Average increasing by 0.36 percent, the Nasdaq composite adding 0.07 percent, and the S and P 500 gaining 0.02 percent.
Analysts like Lee Kyoung-min from Daishin Securities highlighted that renewed geopolitical tensions and rising bond yields following the Bank of Korea's rate-setting meeting contributed to the KOSPI's downturn. The BOK decided to keep its benchmark interest rate unchanged at 2.5 percent for the eighth consecutive time, while signaling potential future monetary tightening due to inflationary pressures and currency concerns.
In the stock market, Samsung Electronics saw a decline of 2.44 percent to 299,500 won, whereas SK hynix rose by 2.05 percent to 2.29 million won. AI investment firm SK Square and semiconductor company Hanmi Semiconductor experienced significant declines, falling by 3.06 percent and 8.31 percent, respectively.
The shipbuilding sector also faced losses, with HD Hyundai Heavy and Hanwha Ocean dropping by 5.38 percent and 7.93 percent, respectively. Defense and energy shares, including Hanwha Aerospace and Doosan Enerbility, retreated as well.
Conversely, Samsung Electro-Mechanics surged 13.44 percent to 1.85 million won, while battery shares saw gains. LG Energy Solution soared 15.25 percent on news of a new contract with a U.S. firm, and Samsung SDI increased by 7.3 percent.
The Korean won was quoted at 1,502.8 won against the U.S. dollar at 3:30 p.m., marking a decrease of 1.6 won from the previous session.