Seoul Stock Market Drops Amid Pessimistic Forecasts for Electric Vehicle Sector
SEOUL – South Korean stocks experienced a significant drop on Wednesday, driven by a decline in battery shares as expectations dim for the global electric vehicle (EV) market next year. The Korean currency also weakened against the U.S. dollar.
According to a news release by Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 20.34 points, or 0.85%, closing at 2,363.17. Trading activity was relatively subdued with 435 million shares traded, amounting to 7.7 trillion won (US$5.7 billion). Stocks that gained were outnumbered by those that lost, 613 to 267.
Foreign and institutional investors sold off local shares worth 342.4 billion won and 62.8 billion won, respectively. Retail investors, however, purchased a net 361 billion won worth of shares. “The overall decline in shares tied to secondary batteries led to an overall slump as many negative factors for secondary battery and EV industries were seen, including Tesla’s earning shock and a downward adjustment of General Motors’ EV production target,” said Lee Kyoung-min, an analyst at Daishin Securities Co.
While Wall Street ended on a positive note overnight, Seoul’s stock market did not follow suit. Leading battery maker LG Energy Solution saw its stock plummet 8.7% to 409,500 won after announcing that its revenue growth is expected to slow down next year due to global economic uncertainties. Its smaller competitor, Samsung SDI, also fell sharply by 7.19% to 445,500 won.
POSCO Future M’s stock price declined by 10.16% to 274,000 won following disappointing third-quarter earnings. Other significant losses were observed in POSCO Holdings, which dropped 6.01% to 445,500 won, and LG Chem, which fell by 6.91% to 458,000 won.
In the auto sector, shares also closed in the negative, with Hyundai Motor down by 0.44% to 182,000 won and its smaller affiliate Kia declining by 0.12% to 82,000 won. Kakao, the operator of the country’s leading mobile messenger, saw its shares decline by 1.64% amid allegations involving the company’s founder in a stock manipulation case.
However, there were some gainers. Internet portal operator Naver rose by 1.12% to 189,100 won, and home appliance maker LG Electronics increased by 3.24% to 108,500 won.
The local currency closed at 1,349.70 won against the U.S. dollar, depreciating by 6.6 won compared to the previous session. Bond prices mostly declined, with the yield on three-year Treasurys rising by 3.4 basis points to 4.038%, and the return on five-year government bonds adding 1.7 basis points to 4.157%.