Seoul: South Korean stocks closed slightly lower Thursday, following a two-day winning streak, as renewed concerns over stretched valuations in artificial intelligence (AI) weighed on major chipmakers despite auto gains. The Korean won fell against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) lost 7.79 points, or 0.19 percent, to close at 4,028.51.
According to Yonhap News Agency, trade volume was moderate at 348.16 million shares worth 13.57 trillion won (US$9.2 billion), with losers outpacing winners 592 to 283. Foreign investors sold 696.49 billion won worth of shares, while individual and institutional investors purchased net amounts of 560.78 billion won and 131.68 billion won in stocks, respectively.
The index had opened lower, despite Wall Street's positive close based on expectations that the Federal Reserve might cut interest rates next week. However, sentiment was fragile among chip shares after Microsoft fell as much as 3 percent due to a report that it reduced AI-software sales quotas, impacting Nvidia and Micron Technology negatively.
"Reports that Microsoft lowered its AI product sales targets have revived worries over softer AI demand and margins. In South Korea, selling pressure was concentrated in semiconductor names, particularly from foreign investors," said Lee Kyung-min, an analyst at Daeshin Securities. He added that automakers performed well.
Most large-cap shares ended mixed, with semiconductor stocks leading the decline. Samsung Electronics went up 0.57 percent to 105,100 won after opening lower, while its chipmaking rival SK hynix decreased 1.81 percent to 542,000 won. Leading battery maker LG Energy Solution was down 1.91 percent to 410,000 won.
In contrast, carmakers gained momentum, with No. 1 automaker Hyundai Motor jumping 6.38 percent to 283,500 won and its sister automaker Kia adding 1.43 percent to 120,300 won on reduced tariff concerns. Earlier in the day, the U.S. administration under President Donald Trump posted on the Federal Register a notice implementing certain tariff elements of a South Korea-U.S. trade deal, including a reduced duty rate of 15 percent on Korean autos retroactive to Nov. 1.
The local currency was quoted at 1,473.5 won against the greenback at 3:30 p.m., down 5.5 won from the previous session. Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys went down 1.6 basis points to 3.025 percent, and the return on the benchmark five-year government bonds decreased 1.7 basis points to 3.229 percent.