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KOSPI slips below 7,000 as external risks rattle investors

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Summary

Korea’s benchmark KOSPI closed lower Tuesday, reversing early gains as geopolitical and trade tensions hurt investor sentiment. It ended at 6,954.52, down 0.58 percent, after briefly climbing above 7,170 in intraday trading. Foreign and institutional investors bought shares, while retail investors sold 3.05 trillion won. The Kosdaq also fell 1.25 percent, and the won weakened to 1,345.6 per dollar.

Key Facts

  • The KOSPI opened 0.72 percent higher and rose above the 7,170 level intraday before dropping more than 120 points in the afternoon.
  • Foreign investors net purchased 644.9 billion won worth of shares, while institutional investors net bought 649.6 billion won.
  • Retail investors net sold 3.05 trillion won, dragging down the market.
  • The Kosdaq closed at 811.88, down 1.25 percent.
  • The won ended at 1,345.6 per dollar, up 5.1 won from the previous session.
By Lee Yeon-woo
  • Published KST
  • Updated KST
KOSPI is displayed in the dealing room of Hana Bank in Seoul, Tuesday. The benchmark index closed at 6,954.52, down 0.58 percent from the previous session. Yonhap

KOSPI is displayed in the dealing room of Hana Bank in Seoul, Tuesday. The benchmark index closed at 6,954.52, down 0.58 percent from the previous session. Yonhap

Korea's benchmark KOSPI reversed early gains to close lower Tuesday, as escalating geopolitical and trade tensions dampened investor sentiment.

The benchmark KOSPI closed at 6,954.52, down 0.58 percent from the previous session. The index opened 0.72 percent higher and climbed above the 7,170 level in intraday trading, but plunged more than 120 points in the afternoon and gave up its earlier gains.

Foreign and institutional investors net purchased 644.9 billion won ($478.8 million) and 649.6 billion won worth of shares, respectively, while retail investors dragged down the index by dumping a net 3.05 trillion won.

SK hynix rose 0.56 percent to close at 1,793,000 won, while Samsung Electronics lost 0.19 percent to finish at 269,500 won.

With U.S. markets closed, the KOSPI initially maintained its upward momentum from the previous session. However, sentiment weakened amid tensions between the U.S. and Iran, as reports of an attack on Saudi Arabian oil facilities pushed crude oil prices higher.

Escalating trade tensions between the U.S. and Canada also weighed on sentiment. U.S. President Donald Trump threatened to stop Canadian aircraft manufacturer Bombardier from selling its jets in the U.S., while Canada imposed retaliatory tariffs of 15 percent to 50 percent on U.S. goods.

Still, nuclear power-related stocks posted notable gains as Korea-U.S. nuclear cooperation marked some progress. Doosan Enerbility gained 1.82 percent, while KEPCO E&C and Daewoo E&C surged 16.6 percent and 8.47 percent, respectively.

Consumer stocks also advanced on bargain hunting, with Lotte Shopping and Hyundai Department Store gaining 4.9 percent and 2.87 percent, respectively.

Automakers, meanwhile, traded lower, weighed down by sluggish sales and unfavorable currency effects. Hyundai Motor and Kia declined 2.04 percent and 2.34 percent, respectively.

"The Korean stock market has now fallen to what appears to be a bottom in terms of its price-to-earnings ratio," said Park Woo-yeol, a research analyst at Shinhan Securities. "I don't expect to see the kind of volatile market conditions we saw in July."

The Kosdaq also extended its losing streak, falling 1.25 percent to close at 811.88.

The won weakened slightly against the dollar. The exchange rate closed at 1,345.6 won per dollar, up 5.1 won from the previous session.

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