Seoul: Seoul shares fell by more than 2 percent Tuesday, snapping their five-day winning streak, as investors moved to take profit after a record-breaking run amid an impasse in peace negotiations between the United States and Iran. The local currency sharply fell against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell 179.09 points, or 2.29 percent, to close at 7,643.15 after reaching as high as 7999.67 shortly after the opening bell. At its lowest, the index fell to 7,423.11. Trade volume was heavy, with 1.02 million shares worth 66.6 trillion won (US$44.8 billion) changing hands, as losers outnumbered winners 731 to 145.
Foreign investors continued their sell-off, unloading local shares worth a net 5.6 trillion won for the fourth consecutive day. Institutions also offloaded shares amounting to 1.2 trillion won, while retail investors bought 6.68 trillion won.
Market analysts were closely watching whether the KOSPI could reach the unprecedented 8,000-point level, buoyed by an extended rally in big-cap tech shares such as Samsung Electronics and SK hynix, fueled by artificial intelligence (AI) optimism. However, profit-taking sentiment and dimming hopes of an end to the U.S.-Israeli conflict with Iran caused the index to lose ground.
Earlier, former President Trump mentioned that he is considering renewing "Project Freedom," an initiative to assist stranded vessels in the Strait of Hormuz. He described the ceasefire with Iran as being on "massive life support" and dismissed Iran's peace offer as a "piece of garbage."
Lee Kyoung-min, an analyst at Daishin Securities, noted that the KOSPI's recent rally was largely driven by strong performances from large-cap semiconductor stocks. The index is now experiencing a pullback as investors seek to take profits. The sharp fall in blue-chip U.S. tech shares during after-hours trading also diminished risk appetite.
Remarks by Kim Yong-beom, Seoul's presidential policy chief, about profit sharing in the AI era further dampened investor sentiment. Kim proposed a "national dividend system," suggesting that the benefits of the AI infrastructure era should not be limited to a few companies.
In the market, Samsung Electronics closed 2.28 percent lower at 279,000 won, while SK hynix dropped 2.39 percent to 1.84 million won. SK Square, an AI investment firm, slid 5.14 percent to 1.13 million won, and Samsung C and T fell 3.76 percent to 435,000 won. Leading battery maker LG Energy Solution plunged 5.34 percent to 443,000 won, and Samsung SDI nosedived 8.04 percent to 629,000 won.
Electrical and shipbuilding shares showed mixed results. HD Hyundai Electric fell 3.89 percent to 1.3 million won, and LS Electric dipped 4.93 percent to 289,000 won, but Samsung Electro-Mechanics surged 6.44 percent to 958,000 won. Major shipbuilder Hanwha Ocean contracted 6.51 percent to 122,000 won, and HD Korea Shipbuilding went down 2 percent to 464,500 won, while HD Korea Shipbuilding jumped 3.21 percent to 707,000 won.
Notably, LG Electronics saw an 18 percent rise to 184,900 won, driven by expectations for its robotics business.
The Korean won was quoted at 1,489.9 won against the U.S. dollar at 3:30 p.m., dropping 17.5 won from the previous session to its weakest level since April 7, influenced by the significant foreign sell-off of Korean stocks. The local currency briefly touched the 1,490-won level during the day.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 7.6 basis points to 3.674 percent, while the return on the benchmark five-year government bonds increased by 9.3 basis points to 3.870 percent.