Seoul shares experienced a significant downturn on Tuesday, plunging over 2 percent and ending a five-day rally. This market correction was primarily driven by investors engaging in profit-taking following a recent record-breaking surge, compounded by ongoing uncertainties in peace negotiations between the United States and Iran. Concurrently, the South Korean won depreciated sharply against the US dollar.
After briefly touching an intraday high of 7,999.67 points shortly after the opening bell, the benchmark Korea Composite Stock Price Index (KOSPI) ultimately closed down by 179.09 points, a 2.29 percent drop, settling at 7,643.15.
During the trading session, the KOSPI index dipped to a low of 7,423.11 points.
Trading activity was robust, with a substantial volume of 1.02 million shares exchanging hands, valued at 66.6 trillion won (approximately $44.8 billion USD). Market breadth was decidedly negative, as declining stocks significantly outnumbered gainers, with 731 issues falling against 145 advancing.
Foreign investors continued their selling streak for the fourth consecutive day, offloading a net 5.6 trillion won worth of local shares. Institutional investors also divested 1.2 trillion won. In contrast, retail investors acted as net buyers, acquiring 6.68 trillion won in shares.
Market observers had keenly watched whether the KOSPI would breach the significant 8,000-point threshold on Tuesday, driven by an extended rally in prominent large-cap technology stocks such as Samsung Electronics and SK Hynix, fueled by widespread artificial intelligence (AI) optimism.
However, the index ultimately retreated, succumbing to strong profit-taking pressure and dampened expectations regarding a resolution to the geopolitical tensions involving the US, Israel, and Iran.
Earlier remarks from Trump indicated consideration of renewing “Project Freedom,” an initiative designed to assist vessels navigating the Strait of Hormuz. He also referred to a ceasefire with Iran as being on “massive life support” and labeled Iran’s peace offer a “piece of garbage,” likely intensifying market unease surrounding the US-Iran relationship.
“As the KOSPI’s recent powerful rally was predominantly fueled by robust performances from large-cap semiconductor stocks, the index is now undergoing a pullback as investors lock in profits,” commented Lee Kyoung-min, an analyst at Daishin Securities. Lee also highlighted that the notable decline in major US blue-chip tech stocks, such as Micron and SanDisk, during after-hours trading further diminished investor risk appetite.
Adding to the dampened sentiment, remarks from Seoul’s presidential policy chief, Kim Yong-beom, concerning profit sharing among tech companies in the burgeoning AI era, also impacted investor confidence. Kim suggested a “national dividend system” on social media, stating, “The fruits from the AI infrastructure era are not generated by only a handful of companies.”
Among market leaders, top-tier chipmaker Samsung Electronics saw its shares decline by 2.28 percent, closing at 279,000 won. Rival semiconductor giant SK Hynix also experienced a loss, dropping 2.39 percent to finish at 1.84 million won.
Artificial intelligence-focused investment firm SK Square reported a 5.14 percent slide, ending at 1.13 million won, while trading conglomerate Samsung C&T dipped 3.76 percent to 435,000 won.
In the battery sector, leading manufacturer LG Energy Solution plunged 5.34 percent to 443,000 won. Its competitor, Samsung SDI, faced an even steeper decline, nosediving 8.04 percent to close at 629,000 won.
Performance across electrical and shipbuilding sector shares was mixed.
Specifically, HD Hyundai Electric fell 3.89 percent to 1.3 million won, and LS Electric saw a 4.93 percent dip to 289,000 won. However, Samsung Electro-Mechanics defied the trend, surging by 6.44 percent to reach 958,000 won.
Among major shipbuilders, Hanwha Ocean saw its shares contract by 6.51 percent, closing at 122,000 won. HD Korea Shipbuilding experienced a 2 percent downturn, settling at 464,500 won, while another instance of HD Korea Shipbuilding shares showed a notable jump of 3.21 percent to 707,000 won.
In a contrasting development, home appliances giant LG Electronics demonstrated exceptional growth, skyrocketing 18 percent to 184,900 won. This significant surge was fueled by strong investor expectations surrounding the potential of its robotics business.
