Officials work at a dealing room of Hana Bank in Seoul on Friday, after the KOSPI closed at 3,853.26, down 151.59 points (3.79%) from the previous day. Photo by Yonhap
South Korean stocks closed sharply lower Friday, as renewed concerns over an artificial intelligence (AI) bubble weighed heavily on big-cap tech shares. The local currency fell to the lowest level in seven months against the U.S. dollar on massive foreign stock selling.
The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 151.59 points, or 3.79 percent, to close at 3,853.26.
Trade volume was moderate at 307.95 million shares worth 14.02 trillion won (US$9.5 billion), with decliners outnumbering gainers 718 to 177.
Foreigners sold a net 2.83 trillion won worth of shares, while retail and institutional investors bought a net 2.29 trillion won and 495.46 billion won worth of shares, respectively.
According to the Korea Exchange, offshore investors’ net selling reached its largest level since Feb. 26, 2021, when they offloaded 2.83 trillion won worth of shares.
The index opened lower, tracking overnight losses on Wall Street, and further extended its decline as investors were wary of the valuation of AI-related shares and their aggressive investment plans.
Also affecting the sentiment was the Federal Reserve‘s monetary policy, as expectations for further rate cuts continued to wane.
“The market surrendered its gains from yesterday’s Nvidia earnings surprise. Following recent sharp gains, volatility appears to have persisted,” Han Ji-young, a researcher at Kiwoom Securities, said.
“But there remains ample potential for sentiment to reverse depending on upcoming key economic data and additional AI-related developments,” the analyst added.
Tech shares dipped following a rally in the previous session.
Market bellwether Samsung Electronics fell 5.77 percent to 94,800 won, and chip giant SK hynix plunged 8.76 percent to 521,000 won.
Major battery maker LG Energy Solution lost 3.51 percent to 425,500 won, and LG Chem dipped 5.53 percent to 367,000 won.
Nuclear power plant builder Doosan Enerbility sank 5.92 percent to 73,100 won, and defense giant Hanwha Aerospace shed 5.13 percent to 869,000 won.
Leading shipbuilder HD Hyundai Heavy skidded 4.8 percent to 555,000 won, and its rival Hanwha Ocean lost 4.16 percent to 119,800 won. No. 1 steelmaker POSCO declined 3.42 percent to 310,500 won.
Carmakers finished mixed. Top automaker Hyundai Motor retreated 0.95 percent to 259,500 won, while its sister affiliate Kia rose 0.53 percent to 114,000 won.
Leading financial group KB Financial decreased 0.58 percent to 120,500 won, while internet portal operator Naver surged 2.14 percent to 262,500 won.
The local currency was quoted at 1,475.6 won against the greenback at 3:30 p.m., down 7.7 won from the previous session.
It marked the weakest level since April 9, when it finished at 1,484.1 won. The April 9 figure was the lowest since March 12, 2009, when the won closed at 1,496.5 amid the global financial crisis.
Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys fell 3.6 basis points to 2.872 percent, and the return on the benchmark five-year government bonds lost 3.9 basis points to 3.076 percent.
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