Seoul: South Korean stocks dropped more than 1 percent on Monday due to losses in major technology shares, as investors expressed skepticism about potential rate cuts by the Federal Reserve amidst strong U.S. economic data. The local currency also weakened against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell by 26.22 points, or 1.04 percent, closing at 2,489.56 and continuing a two-session losing streak. The trading volume was moderate, with 569.34 million shares valued at 8.89 trillion won (approximately US$6.04 billion) changing hands, and the number of losers exceeding winners by 637 to 261.
Foreign investors sold a net 878.67 billion won, while retail and institutional investors purchased a net of 746.47 billion won and 25.38 billion won worth of shares, respectively. Lee Kyung-min, an analyst at Daishin Securities, commented that a stronger-than-expected U.S. jobs report signaled a robust economy, prompting the Federal Reserve to possibly adopt a cautious approach toward further interest rate cuts. This outlook contributed to the projected decline in the KOSPI following recent gains.
On Friday, both the Dow Jones Industrial Average and the Nasdaq composite saw a decrease of 1.63 percent each. In South Korea, tech blue chips faced significant downward pressure, impacting the broader index. Samsung Electronics, the market leader, fell 2.17 percent to 54,100 won, while chipmaker SK hynix dropped 4.52 percent to 194,300 won.
In the electric vehicle battery sector, LG Energy Solution declined 0.29 percent to 347,500 won, and LG Chem, a top chemicals manufacturer, decreased 1.63 percent to 241,000 won. Among automakers, Hyundai Motor fell 2.65 percent to 220,000 won, while Kia slightly decreased by 0.19 percent to 105,400 won. POSCO Holdings, a leading steelmaker, saw a 1.91 percent decline to 257,000 won.
Bio shares showed mixed performance, with Samsung Biologics rising 1.2 percent to 1,012,000 won, whereas Celltrion slipped 0.7 percent to 183,800 won. On the upside, Naver, the top portal operator, increased by 0.99 percent to 204,000 won, and KB Financial Group, a major financial firm, surged 1.71 percent to 89,300 won.
The South Korean won was quoted at 1,470.8 against the U.S. dollar at 3:30 p.m., reflecting a decline of 5.8 won from the previous session. Bond prices closed lower, with the yield on three-year Treasurys rising by 10.3 basis points to 2.664 percent, and the return on five-year government bonds increasing by 6.2 basis points, ending at 2.746 percent.