Seoul - South Korean stocks experienced a significant decline of over 2 percent on Wednesday. This downturn was primarily driven by investors taking profits ahead of the anticipated release of the Federal Reserve's latest meeting minutes. Concurrently, the Korean won weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 62.50 points, or 2.34 percent, settling at 2,607.31. This drop marked an end to its four-day winning streak. The trade volume was moderate, with 455.9 million shares traded, amounting to 9.99 trillion won (US$7.65 billion). There were more losers than winners in the market, with 610 stocks declining and 279 advancing.
The selling was led by foreigners and institutions, who offloaded shares worth 93.4 billion won and 1.2 trillion won respectively. This selling was partially offset by individual investors, who bought stocks valued at 1.3 trillion won.
The U.S. stock market's previous performance also influenced the Seoul market. The Dow Jones Industrial Average marginally increased by 0.07 percent to 37,715.04, while the Nasdaq, known for its tech-heavy composition, fell 1.6 percent to 14,765.94. Investors are awaiting the release of the Federal Reserve minutes, scheduled for Wednesday (U.S. time), with expectations of a potential interest rate cut by the U.S. bank later this year.
Mirae Asset Securities analyst Park Kwang-nam commented on the influence of the U.S. market on South Korean stocks, noting the adjustment in bets on the Fed's rate cut and caution ahead of upcoming employment data.
In Seoul, the downturn affected most large-cap stocks. Market leaders like Samsung Electronics Co. and SK hynix Inc. saw their shares decline by 3.27 percent and 3.93 percent, respectively. LG Energy Solution and Samsung SDI, both major players in the battery market, also experienced significant drops. The steel giant POSCO Holdings and leading chemical producer LG Chem were not spared, seeing their stock prices fall as well.
The automotive sector also faced a downturn, with Hyundai Motor and its affiliate Kia both recording losses in their share prices.
The local currency, the Korean won, closed weaker against the U.S. dollar, and bond prices fell, with yields on government bonds rising.