Seoul Shares Dip on Foreign Investor Sell-Off, Despite Wall Street Rally
SEOUL— Seoul shares concluded lower on Wednesday, reversing gains from a two-day rally as foreign investors booked profits, despite a positive close on Wall Street. The local currency appreciated against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) declined by 22.80 points, or 0.8 percent, finishing the day at 2,843.29. Trading volumes were robust with 534.4 million shares changing hands, valued at approximately 13.6 trillion won ($9.85 billion). Market dynamics showed a larger number of decliners at 460 compared to 409 advancers. Foreign entities were net sellers, offloading shares worth 261.4 billion won, which nearly offset the combined net purchases of 248.9 billion won by retail investors and institutions.
The backdrop of the local downturn was an upbeat session in the U.S. markets, where the Dow Jones Industrial Average soared by 1.9 percent to reach a new high, and both the S&P 500 and Nasdaq Composite saw gains of 0.2 percent and 0.6 percent, respectively. This surge was fueled by rising anticipation of a potential Federal Reserve rate cut.
Despite the recent upturn, Kang Jae-jyun, an analyst at SK Securities, expressed caution about the upward trajectory of the KOSPI, noting that "Expectations for a rate cut by the Fed in September and possibly an additional cut within the year have already been reflected in the market."
Sector-wise, technology and automotive stocks led the declines. Market leader Samsung Electronics fell 1.14 percent to 86,700 won, and Hyundai Motor dropped 2.19 percent to 268,500 won. In the battery sector, LG Energy Solution and Samsung SDI saw declines of 2.89 percent and 1.11 percent, closing at 336,500 won and 356,000 won, respectively.
Contrastingly, SK Innovation surged 5.65 percent to 119,700 won in anticipation of pivotal board meeting outcomes regarding its proposed merger with group affiliate SK E and S, which aims to establish a large-scale energy conglomerate. Shipbuilding companies also reported gains, with Samsung Heavy Industries and HD Hyundai Heavy Industries rising by 6.32 percent and 2.21 percent, reaching 10,930 won and 171,200 won, respectively.
The Korean won strengthened, trading at 1,381.5 against the dollar by the 3—30 p.m. close, a gain of 3.4 won from the previous session.