Seoul: Seoul stocks experienced a notable decline as they opened sharply lower on Thursday, though they managed to pare some losses to trade nearly 3 percent lower by late morning. This downturn followed an overnight sell-off in U.S. semiconductor stocks that exerted pressure on Korean chipmakers.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) initially fell 4.46 percent, but later trimmed some of its losses. As of 11:20 a.m., the index was down 235.04 points, or 2.8 percent, at 8,068.37. In response to the sharp drop, the Korea Exchange (KRX) activated a sell-side sidecar for the KOSPI at around 9:07 a.m., halting program trading for five minutes. This measure is triggered when the KOSPI 200 Futures index decreases 5 percent or more for at least one minute.
The index witnessed a plunge of nearly 7 percent before 10 a.m. due to heavy foreign selling but managed to regain some ground as institutional and retail investors stepped in. Meanwhile, U.S. stocks had retreated overnight, with the S and P 500 slipping 0.2 percent and the tech-heavy Nasdaq 100 falling 1.5 percent. The Philadelphia Semiconductor Index, a crucial indicator of chip stocks, tumbled 6.3 percent.
Federal Reserve Chair Kevin Warsh's remarks on easing inflation expectations and risks have fueled hopes for a delay in interest rate hikes. However, investor sentiment remained cautious due to the latest developments in U.S.-Iran talks, which ended another round of indirect negotiations on Wednesday without significant progress.
The tech sector faced considerable pressure, with major players like Samsung Electronics declining 4.29 percent and SK hynix losing 5.2 percent. Conversely, Hanwha Group affiliates outperformed the broader market following Hanwha Ocean's selection as the preferred bidder for the Navy's 7.8 trillion-won (US$5.1 billion) next-generation destroyer project. Hanwha Aerospace saw a rise of 7.79 percent, while Hanwha Ocean gained 3.29 percent.
The Korean won was trading at 1,553.2 won per U.S. dollar as of 11:20 a.m., marking an increase of 1.7 won from the previous session.