Seoul: Seoul stocks ended a three-day winning streak, closing over 0.7 percent lower amid renewed concerns of a trade war between the United States and China. The local currency reached its lowest level in over five months against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell 26.05 points, or 0.72 percent, to settle at 3,584.55. The trading volume was moderate, with 404.5 million shares worth 14.1 trillion won (US$9.9 billion) changing hands. The market saw more losers than gainers, with 595 stocks declining compared to 272 advancing.
Foreign and institutional investors were net sellers, disposing of stocks worth 821.1 billion won and 447.8 billion won, respectively, while retail investors acquired a net 1.2 trillion won. The KOSPI's decline was less severe compared to Wall Street's performance the previous Friday, as U.S. President Donald Trump hinted at possibly easing back on new tariffs against China, noted Lee Kyoung-min of Daishin Securities.
Trump had previously threatened to impose a 100 percent tariff on China in response to China's announcement of extensive controls on rare earth exports. "However, the two countries might engage in a tug-of-war to enhance their bargaining power before meeting at the negotiating table later this month, which could create further uncertainty," Lee added. The two leaders have agreed to meet at the Asia-Pacific Economic Cooperation (APEC) summit scheduled for later this month in Gyeongju.
In the Seoul market, most large-cap shares saw declines, with semiconductor stocks leading the downturn. Samsung Electronics, a market leader, fell 1.17 percent to 93,300 won, while its competitor SK hynix dropped 3.04 percent to 415,000 won. Hanwha Aerospace, a defense giant, decreased 4.7 percent to 993,000 won. KB Financial Group slipped 1.06 percent to 111,600 won, and major portal operator Naver declined 1.87 percent to 262,500 won.
Conversely, metal shares rose on expectations that rare metal prices will increase following China's export restrictions on critical minerals. Korea Zinc, a supplier of rare metals like indium used in semiconductors and flat-panel displays, surged 19.48 percent to 1,153,000 won. Meanwhile, steelmaker POSCO Holdings gained 3.61 percent to reach 272,500 won.
The Korean won closed at 1,425.8 against the U.S. dollar, a decrease of 4.8 won from the previous session's close, marking its lowest level since April 29.