As the deadline for the mutual tariff suspension of the Donald Trump administration approaches, both the KOSPI and KOSDAQ indices showed a downward trend. There are opinions that volatility may increase until the trade negotiations are finalized.
The KOSPI index closed at 3054.28 on the 4th. It fell by 61.99 points (1.99%) compared to the previous day, giving up the 3100 level in just one day. In the KOSPI market, institutions led the index decline with a net sell of 444 billion won. Individuals net bought 257.1 billion won, while foreigners reversed from a 'sell' position to a net buying of 162.5 billion won during the session.
The drop in the KOSPI index on that day was the largest since April. After President Trump announced the so-called 'Liberation Day' tariffs on April 2, the KOSPI index fell by 5.57% and 1.54% on the 7th and 9th of the same month, respectively.
As the end of the mutual tariff suspension period approaches, President Trump is increasing pressure. He stated that from the 4th (local time), he would send letters detailing tariff rates to various countries. He mentioned that the tariff rates would range from as low as 10% to as high as 70%. The implication is that if negotiations are not concluded quickly, high mutual tariff rates will be notified.
Among the stocks listed in the KOSPI market, the prices of 741 stocks fell compared to the previous day, while only 161 stocks showed strength. Large-cap stocks also struggled. Among the top 10 stocks by market capitalization, only Celltrion showed an upward trend by announcing a buyback of its own shares worth 500 billion won during the year, while stocks of Samsung Electronics, SK hynix, Samsung Biologics, and Hyundai Motors declined.
Analysts noted that the passing of the amendment to the Commercial Act in the National Assembly also influenced the disappearance of catalysts for the rise in stock prices. Lee Kyung-min, a researcher at Daishin Securities, said, 'There is increasing pressure for profit realization in sectors such as defense, shipbuilding, and food and beverage, which have continued to rise. With the passage of the Commercial Act amendment, the issue has dissipated, and some investors are disappointed by the pace adjustment of certain provisions like the concentrated voting system.'
Nevertheless, the stock prices of utility public enterprises such as Korea Electric Power Corporation and Korea Gas Corporation showed strength. As the duty of care for directors under the Commercial Act broadened from 'the company and shareholders' to include 'the company and shareholders,' there is a forecast that the government will find it difficult to artificially suppress electricity and gas rates.
The KOSDAQ index was also not free from tariff uncertainties. The KOSDAQ index closed at 775.8, down 17.53 points (2.21%) compared to the previous day. In the KOSDAQ market, foreigners and institutions showed selling dominance with net sales of 322 billion won and 79.3 billion won, respectively. Only individuals net bought 398.1 billion won.
Among the stocks listed in the KOSDAQ market, 1284 stocks fell, while 394 stocks rose. All of the top 10 market capitalization stocks in the KOSDAQ market, including the leading stock Alteogen, Ecopro BM, and HLB, experienced declines.
The announcement period for second-quarter results (April to June) has also begun. Major corporations will follow LG Electronics, starting on the 7th, to disclose their second-quarter results. Depending on the outcomes, leading sectors and stocks are expected to diverge.
Lee Jae-won, a researcher at Shinhan Investment Corp, noted, 'In a situation where there is still caution regarding tariff negotiations, attention is expected to shift to the announcement of second-quarter results. We should watch for hints that could lead to renewed buying in existing leading stocks.'
The won-dollar exchange rate in the Seoul foreign exchange market closed at 1362.3 won per dollar, up 2.9 won from the previous day. The U.S. stock market will be closed on this day due to Independence Day.