SEOUL — South Korean stocks declined by more than 0.9 percent on Friday, affected by concerns over the government's corporate value-up program after the general elections and reduced foreign investment due to a strong U.S. dollar. Additionally, the Korean won dropped to its lowest level in 17 months against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index decreased by 25.14 points, closing at 2,681.82, a drop of 0.93 percent. The trade volume was recorded at 501.3 million shares, totaling 11.7 trillion won (approximately US$8.5 billion). There were 507 decliners compared to 368 gainers. Retail and foreign investors were net buyers of stocks, purchasing shares worth 589.8 billion won and 16.5 billion won, respectively, while institutional investors sold shares worth 636.1 billion won.
Lee Kyoung-min, an analyst at Daishin Securities, noted that the strength of the U.S. dollar negatively impacted foreign purchases of South Korean stocks. He also mentioned that the government’s corporate value-up program had adversely affected stocks with low price-to-book ratios following the victory of the opposition party in recent elections. The Bank of Korea held its key interest rate steady at 3.5 percent for the tenth consecutive session, further damping investor sentiment. As a result, major companies such as Samsung Electronics and SK hynix saw their share prices decline, alongside other key sectors like automotive and financials. However, some firms like Celltrion and Naver saw modest gains.
The Korean won closed at 1,375.40 against the U.S. dollar, marking a significant depreciation from the previous session and reaching its lowest point since November 2016.