Seoul: Seoul shares ended lower on Wednesday as weaker-than-expected U.S. inflation data led investors to reassess their expectations of rate cuts by the Federal Reserve. The Korean won also depreciated against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped 28.9 points, or 0.9 percent, closing at 3,186.38. Trade activity was moderate, with 525.37 million shares exchanged, amounting to 11.09 trillion won (US$8 billion). The market saw more decliners than gainers, with 704 shares decreasing in value compared to 189 that gained.
Institutional investors sold a net 552.8 billion won worth of stocks, counterbalancing the net purchases by foreign investors and individuals, which amounted to 26.79 billion won and 429.99 billion won, respectively. U.S. inflation recorded a 2.7 percent increase in June, falling short of market expectations, as companies started passing some tariff-related costs onto consumers. This inflation data, coupled with President Donald Trump's recent tariff threats, continued to unsettle investors, analysts remarked.
Despite the overall decline, some factors helped mitigate the losses. Hwang Joon-ho, an analyst at Sangsangin Investment and Securities Co., noted that Nvidia's plan to resume H20 AI chip sales to China spurred demand for chip stocks, offering some support to the KOSPI. In terms of individual stocks, large-cap shares showed mixed results. Market leader Samsung Electronics experienced a rise of 1.57 percent to 64,700 won, whereas chip manufacturer SK hynix saw a decrease of 0.84 percent to 296,000 won.
Other notable movements included Hanwha Aerospace, which increased by 0.71 percent to 854,000 won, and HD Hyundai Heavy Industries, which gained 1.77 percent to 401,500 won. Conversely, Hyundai Motor, a top carmaker, fell 1.66 percent to 207,500 won, and leading battery producer LG Energy Solution decreased by 1.74 percent to 311,000 won.
The Korean won concluded the day at 1,385.70 against the U.S. dollar, marking a decline of 5.5 won from the prior session. In the bond market, prices rose, with the yield on three-year Treasurys falling 0.4 basis points to 2.459 percent, and the yield on five-year government bonds declining 0.2 basis points to 2.642 percent.