Seoul: Seoul stocks ended their three-day winning streak on Monday, closing over 0.7 percent lower due to renewed concerns about a trade war between the United States and China. The local currency also fell to its lowest level in more than five months against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) dropped 26.05 points, or 0.72 percent, to close at 3,584.55. The trading volume was moderate, with 404.5 million shares valued at 14.1 trillion won (US$9.9 billion) changing hands. The market saw more losers than gainers, with 595 stocks declining compared to 272 advancing.
Foreign and institutional investors were net sellers, offloading 821.1 billion won and 447.8 billion won worth of stocks, respectively. Conversely, retail investors purchased a net 1.2 trillion won. Despite the fall, the KOSPI's decline was less severe than Wall Street's on Friday, following U.S. President Donald Trump's indication of potentially retracting new tariffs on China, explained Lee Kyoung-min from Daishin Securities.
Trump had previously threatened a 100 percent tariff on China after the latter announced extensive controls on rare earth exports. "But the two countries could engage in a tug-of-war to increase their bargaining power before they meet at the negotiating table later this month, which could increase noise down the road," Lee noted. The two leaders are expected to meet at the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju later this month.
In the local market, most large-cap shares saw declines, particularly in the semiconductor sector. Samsung Electronics fell by 1.17 percent to 93,300 won, while SK hynix dropped 3.04 percent to 415,000 won. Hanwha Aerospace slid 4.7 percent to 993,000 won, KB Financial Group decreased by 1.06 percent to 111,600 won, and Naver, a major portal operator, declined by 1.87 percent to 262,500 won.
Conversely, metal shares gained, driven by expectations of rising rare metal prices following China's export restrictions on critical minerals. Korea Zinc, a supplier of rare metals used in semiconductors and flat-panel displays, surged by 19.48 percent to 1,153,000 won, and steelmaker POSCO Holdings increased by 3.61 percent to 272,500 won.
The Korean won ended at 1,425.8 won per U.S. dollar, a decrease of 4.8 won from the previous session's close, marking its lowest level since April 29. Bond prices, which move inversely to yields, rose. The yield on three-year Treasurys dropped 3.7 basis points to 2.554 percent, while the yield on the benchmark five-year government bonds decreased 5.4 basis points to 2.677 percent.