Seoul stocks experienced a significant drop of over 3 percent on Thursday, as investors reacted to developments in ongoing discussions between the United States and Iran. The Korean won also weakened against the US dollar.
The Korea Composite Stock Price Index (KOSPI) benchmark declined by 181.75 points, representing a 3.22 percent decrease, to close at 5,460.46.
Trading volume was moderate, with 902.9 million shares changing hands, valued at 24.1 trillion won ($15.9 billion). Declining stocks outnumbered advancing ones by a ratio of 662 to 226.
Foreign investors continued their selling spree, offloading a net 3.1 trillion won worth of shares. Institutional investors also sold a net 338.7 billion won. Conversely, individual investors were net buyers, purchasing a net 3.06 trillion won.
“Market uncertainties stemming from the Middle East situation and concerns surrounding the semiconductor market weighed heavily on investor sentiment,” explained Lee Kyoung-min, an analyst at Daishin Securities.
Negotiations between the US and Iran regarding their month-long conflict have shown divergence. While the White House maintains that talks with Tehran are progressing smoothly, a high-ranking Iranian official indicated that while “messages” were being exchanged, the nature of negotiations was questionable.
The semiconductor sector faced selling pressure following the introduction of Google’s new artificial intelligence compression algorithm, TurboQuant, which sparked fears of a potential decrease in demand for memory chips in the near future.
The majority of large-cap stocks ended the trading day lower, with semiconductor companies leading the market’s downward trend.
Samsung Electronics, a major chip manufacturer, saw its shares fall by 4.71 percent to 180,100 won, while its competitor, SK hynix, experienced a 6.23 percent decrease, closing at 933,000 won.
In contrast, Lotte Chemical, a prominent chemical company, increased by 0.88 percent to 80,500 won. This followed comments from Iran’s top envoy to South Korea, who stated that Korea is considered a non-adversarial country and that its vessels could transit the Strait of Hormuz with prior coordination with Tehran.
KB Financial gained 1.87 percent to reach 152,200 won, and Shinhan Holdings, another major financial group, rose by 1.41 percent to 93,400 won.
