Seoul:Seoul shares plunged by more than 5 percent on Tuesday, extending their losing streak to a fifth session. This decline was driven by a significant drop in technology stocks, which faced renewed concerns over the artificial intelligence sector and inflation.
According to Yonhap News Agency, the Korean won also traded lower against the U.S. dollar. The Korea Composite Stock Price Index (KOSPI) opened 3.1 percent lower and eventually fell 348.89 points, or 5.46 percent, to close at 6,035.35. Foreign investors sold a net 4.51 trillion won (US$3.35 billion) in stocks, while institutions and individual investors purchased a net 1.69 trillion won and 2.23 trillion won, respectively.
The Korea Exchange activated a sell-side sidecar during morning trading after the KOSPI dropped more than 5 percent for at least one minute. Trade volume was moderate, with 399.87 million shares worth 26.79 trillion won exchanged, and decliners outnumbered advancers by 628 to 246.
Concerns over OpenAI's revenue and the completion of local chipmakers' share buybacks continued to pressure tech stocks, as noted by Han Ji-young, an analyst at Kiwoom Securities. Meanwhile, U.S. stocks closed mixed overnight, with the Dow Jones Industrial Average rising 0.38 percent and the tech-heavy Nasdaq composite falling 0.44 percent. Reports of rapid technological progress by Chinese rival ChangXin Memory Technologies (CXMT) contributed to a slump in chipmaker stocks.
Investors are now looking ahead to the forthcoming U.S. consumer price index (CPI) report, set for release on Wednesday (U.S. time), which could provide insights into the Federal Reserve's policy outlook before its October rate-setting meeting.
In Seoul, technology stocks led the decline. Samsung Electronics dropped 7.39 percent to 232,000 won, and SK hynix fell 10.09 percent to 1.44 million won. Hanwha Aerospace decreased by 2.67 percent to 839,000 won, and Hyundai Motor was down 1.56 percent to 315,000 won. Among the gainers, HMM increased by 1.15 percent to 22,050 won, and Korea Electric Power Corp. rose 2.1 percent to 29,150 won.
The Korean won was quoted at 1,345.1 won against the U.S. dollar at 330 p.m., compared to 1,335.1 won in the previous session. Bond prices rose, with the yield on three-year Treasurys falling 6.4 basis points to 3.857 and the benchmark five-year government bond yield decreasing by 7.1 basis points to 4.030.