Seoul Stock Market Suffers Amid Pessimistic Forecasts for Electric Vehicle Sector

SEOUL - South Korean stocks took a sharp downturn on Wednesday, driven by a steep decline in shares related to the battery and electric vehicle (EV) sectors. The bearish sentiment was influenced by forecasts suggesting a slowdown in global demand for electric vehicles next year amid economic uncertainties. The benchmark Korea Composite Stock Price Index (KOSPI) dropped by 20.34 points, or 0.85%, to close at 2,363.17.

According to a news release by Yonhap News Agency, trading volume for the day was relatively low, amounting to 435 million shares worth 7.7 trillion won (US$5.7 billion). In a market where gainers outnumbered losers by 613 to 267, foreign investors and institutions offloaded local shares worth 342.4 billion won and 62.8 billion won, respectively. Conversely, retail investors purchased a net of 361 billion won in shares.

Lee Kyoung-min, an analyst at Daishin Securities Co., pointed out that the overall stock market decline was predominantly led by negative trends in the battery and EV sectors. Factors such as Tesla's recent earnings disappointment and General Motors' downward adjustment in its EV production target contributed to the slump.

Despite the gloomy outlook domestically, Wall Street indices ended on a high note. The Dow Jones Industrial Average increased by 0.62%, the Nasdaq composite climbed 0.93%, and the S&P 500 rose 0.73%.

In the local market, leading battery manufacturer LG Energy Solution saw its stock price decline by 8.7% to 409,500 won after announcing that its revenue growth is likely to decelerate next year. Smaller competitors like Samsung SDI and POSCO Future M also suffered, with stock prices dropping 7.19% and 10.16% respectively due to weaker-than-expected third-quarter earnings.

Other key market players were not immune to the downward trend. Steel behemoth POSCO Holdings fell 6.01%, and top chemical manufacturer LG Chem saw a 6.91% decline in share price. Market leader Samsung Electronics lost 0.73%, but the second-largest chipmaker SK hynix managed to gain 0.55%.

Automotive stocks also faced losses, with Hyundai Motor down by 0.44% and its affiliate Kia losing 0.12%. Kakao, the operator of South Korea’s leading mobile messenger, saw its shares decline 1.64% amid allegations that the company’s founder is involved in stock manipulation. However, Internet portal operator Naver gained 1.12%, and home appliances maker LG Electronics rose 3.24%.

The local currency also weakened against the U.S. dollar, closing at 1,349.70 won, a decline of 6.6 won compared to the previous session.

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