Seoul: South Korean shares experienced a significant downturn on Tuesday, plunging by over 2 percent following a substantial sell-off by foreign investors, which ended the four-day winning streak of the market. Concurrently, the Korean won saw a notable drop against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 100.13 points, or 2.37 percent, closing at 4,121.74. This marked a retreat below the 4,200 milestone, which it had just surpassed the previous day. Trading activity was robust, with a volume of 421.1 million shares valued at 20.7 trillion won (US$14.4 billion), and the number of losing stocks exceeded winners, 504 to 380.
Foreign and institutional investors offloaded local shares valued at 2.2 trillion won and 498.5 billion won, respectively, as part of their profit-taking strategies. In contrast, retail investors remained active buyers, with net purchases amounting to 2.7 trillion won.
Meanwhile, in the U.S., the tech-heavy Nasdaq composite rose by 0.46 percent due to gains in blue-chip tech shares, while the S and P 500 increased by 0.17 percent. The Dow Jones Industrial Average, however, dipped by 0.47 percent. Amazon Web Services soared by 4 percent after securing a multiyear $38 billion agreement with OpenAI, and Nvidia's shares climbed 2.17 percent following the Donald Trump administration's approval for exporting Nvidia chips to Microsoft's data centers in the United Arab Emirates.
Lee Kyoung-min, an analyst at Daishin Securities, commented on the situation, stating, "The KOSPI is now taking a breather after the recent surges driven by expectations surrounding the Asia-Pacific Economic Cooperation (APEC) gathering last week." He further noted that shares leading the recent bull run, such as Samsung Electronics and SK hynix, along with those benefiting from Korea's tariff deal with the United States, including automakers and shipbuilders, have lost ground.
Among the significant market movers, market leader Samsung Electronics dropped 3.51 percent to 107,200 won, while its rival SK hynix declined 5.48 percent to 586,000 won after both reached record highs on Monday. Major shipbuilder HD Hyundai Heavy decreased by 6.59 percent to 567,000 won, Hanwha Ocean fell 1.59 percent to 136,600 won, and HD Korea Shipbuilding retreated 4.59 percent to 457,500 won. Defense industry leader Hanwha Aerospace fell 3.07 percent to 1.01 million won, and Internet portal operator Naver slipped 2.37 percent to 268,000 won. In the automotive sector, Hyundai Motor plunged 5.32 percent to 276,000 won, while Kia declined by 3.31 percent to 113,800 won.
On a positive note, financial shares were among the few gainers, with KB Financial rising 2.12 percent to 120,500 won and Shinhan Financial climbing 3.1 percent to 76,400 won. The local currency was quoted at 1,437.9 won against the greenback at 3:30 p.m., a decrease of 9.1 won from the previous session. Bond prices closed higher, with the yield on three-year Treasurys dropping 1.2 basis points to 2.729 percent, and the return on benchmark five-year government bonds falling 0.4 basis points to 2.879 percent.