Seoul: South Korean stocks plunged by more than 5 percent as investors locked in profits from a recent tech-led rally while monitoring uncertainty surrounding U.S.-Iran peace negotiations. The local currency also weakened sharply against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) lost 478.82 points, or 5.54 percent, closing at 8,160.59. This marked a second consecutive session of decline for the KOSPI. The Korea Exchange suspended program trading for the KOSPI for five minutes at 9:08 a.m. after the KOSPI 200 Futures index dropped 5 percent or more for at least one minute.
Trading volume was moderate, with 446.37 million shares worth 45.73 trillion won (US$29.71 billion) exchanging hands. The market saw a significant disparity, with 671 stocks declining compared to 224 advancing. Overnight, major U.S. stocks closed mixed. The Dow Jones Industrial Average rose by 1.73 percent, and the S and P 500 added 0.41 percent to 7,584.31. However, the tech-heavy Nasdaq composite saw a slight decline of 0.09 percent as declines in AI-related stocks affected the index.
In Seoul, most large-cap stocks ended lower as foreign investors extended their selling streak to a 20th consecutive session. Technology heavyweights mirrored declines in U.S. semiconductor stocks after Broadcom's disappointing quarterly results and guidance. The chipmaker's shares tumbled over 12 percent, impacting the Korean market as well. Han Ji-young, an analyst at Kiwoom Securities, suggested that the decline was also due to investors raising cash ahead of major events like SpaceX's anticipated Nasdaq listing.
Large-cap shares in Seoul saw significant losses. Market leader Samsung Electronics fell 6.4 percent to 329,000 won, while rival chipmaker SK hynix plunged 9.92 percent to 2,070,000 won. AI investment firm SK Square dipped 7.57 percent to 1,258,000 won, and top automaker Hyundai Motor remained steady at 700,000 won. However, financial stocks showed gains, driven by expectations of a potential interest rate hike amid mounting inflationary pressures. KB Financial surged 4.51 percent to 171,600 won, and Shinhan Financial advanced 7.39 percent to 107,500 won.
The Korean won was quoted at 1,539.1 won against the U.S. dollar at 3:30 p.m., down 9.4 won from the previous session, reflecting the broader economic uncertainties impacting the market.