The KOSPI index, which had surged past the 2720 mark to set a new annual high, closed lower on the 30th. It could not overcome the selling pressure from foreign and domestic institutional investors taking profits. Additionally, concerns over tariffs from the U.S. reignited, leading foreign investors to sell over 690 billion won worth of stocks in just one day.
According to the Korea Exchange, the KOSPI index closed at 2,697.67, down 22.97 points (0.84%) from the previous trading day. It started at 2,713.24, falling 7.40 points (0.27%) from the previous close and then extended its decline. The intraday high was merely 2,717.54, and it even dipped to 2,689.87.
Profit-taking selling pressure primarily from foreign and institutional investors flooded the market. The KOSPI surged more than 83 points (3.16%) over two days on the 28th and 29th, significantly influencing this decline. Notably, the previous day's closing price of 2,720.64 was the highest since August 1, 2024 (2,777.68), nine months ago.
Foreign and institutional investors shifted from simultaneous net buying to net selling after two consecutive days. Foreign investors sold a net 695.7 billion won worth of stocks in just one day. Institutions also sold a net 44 billion won, contributing to the overall decline. Only individual investors remained as net buyers, purchasing 725 billion won worth.
The revival of the Trump's administration's tariff policy also became a negative factor. The request for a "stay" filed in response to the federal international trade court's ruling nullifying the mutual tariffs was granted. The U.S. Court of Appeals restored the effectiveness of the tariffs during the appeal process.
Han Ji-young, an analyst at Kiwoom Securities, noted, "The upcoming major event of the new government's launch next week may bring additional uncertainty as influential presidential candidates are expected to present capital market system-related policies. This suggests that the stocks of holding companies, deemed undervalued in the domestic stock market, will likely continue to rise."
The top 10 corporations by market capitalization on the KOSPI mostly closed lower. Although the performances of semiconductor stocks Samsung Electronics and SK hynix were mixed, the leading secondary battery stocks LG Energy Solution and defense firm Hanwha Aerospace both ended lower.
Automotive stocks also closed lower across the board. Kia's stock price fell by over 4%, while Hyundai's stock also dropped by nearly 3%. This contrasts with the previous day's rise due to expectations of alleviation of tariff impacts. Hyundai Mobis ended down 3.80% as well.
Stocks related to the upcoming presidential election soared. In particular, amid the political emphasis on boosting the stock market, the prices of holding companies previously considered undervalued in the domestic market rose. HS HYOSUNG's stock price increased by over 11% on the day. Additionally, renewable energy-related stocks demonstrated strength.
Lee Jae-won, an analyst at Shinhan Investment Corp, expressed, "The big event of the new government’s launch next week is pending," adding, "As strong potential presidential candidates all unveil capital market policies, the stock prices of holding companies are expected to continue to rise."
The KOSDAQ index also closed lower, recording a drop of 1.94 points (0.26%) to 734.35. Similar to the KOSPI, the index decline was led by foreign investors turning to selling, with a net sale of 126.1 billion won. Institutions also sold a net 4 billion won, while individual investors were net buyers of 130.1 billion won.
The stock prices of top corporations on the KOSDAQ exhibited mixed results. Stocks of secondary battery companies like Ecopro and ECOPRO BM fell, while bio stocks generally rose due to the benchmark interest rate cut. ABL Bio's stock price jumped by over 3%.
Meanwhile, in the Seoul foreign exchange market, the won/dollar exchange rate closed at 1,379.60 won, up 8.50 won (0.62%) from the previous trading day. As uncertainties related to the Trump administration's tariff policies increased, risk appetite was interpreted to have weakened, contributing to the depreciation of the won.