South Korean Shares Slide on Chip Selloff

The benchmark KOSPI fell more than 2% to around 6,640 on Monday, extending losses from the previous session, as renewed US-Iran tensions fueled concerns over higher oil prices and broader risk-off sentiment. US forces struck Iranian rocket launchers near the Strait of Hormuz, pushing Brent crude higher and weighing heavily on Asian equities. At the same time, hawkish comments from Federal Reserve Chair Kevin Warsh reinforced expectations for a September rate hike, pushing US Treasury yields higher and adding pressure on risk assets, particularly technology shares. Meanwhile, stronger domestic fundamentals offered some cushion, with July facility investment rising 7.5% month-on-month and electronic-component output jumping 20.7%, supported by robust semiconductor demand. Among major decliners were Samsung Electronics (-2.7%), SK hynix (-3.5%), SK Square (-2.5%), Hanwha Aerospace (-1.4%), and Doosan Enerbility (-6.6%).

The benchmark KOSPI fell 1.79% to close at 6,789 on Friday, snapping a three-day rally, as investors sold off technology heavyweights and remained cautious ahead of Federal Reserve Chair Kevin Warsh’s speech at the Jackson Hole symposium. The decline came despite a strong overnight session on Wall Street, following Nvidia’s stronger-than-expected earnings and upbeat revenue outlook. Korean chipmakers failed to track the gains, with Samsung Electronics and SK hynix falling 2.82% and 3.87%, respectively, as reports that Washington could be weighing a new round of semiconductor tariffs raised concerns about the outlook for Korea’s key export industry. At the same time, Samsung Biologics plunged 6.78% after announcing plans to raise KRW 3 trillion through a rights offering, adding further pressure to the index. Notable losses were also recorded in SK Square (-3.09%), HD Hyundai Heavy Industries (-2.77%), SK Inc (-2.34%), and LS Electric (-2.28%).

The benchmark KOSPI climbed 1.53% to close at 6,912 on Thursday, extending gains for a third straight session, supported by stronger-than-expected Nvidia earnings. Nvidia's revenue more than doubled in the second quarter, and its forecast for fiscal 2028 income growth of 70% exceeded analyst expectations, easing concerns over AI and semiconductor demand. Semiconductor stocks led the advance, with Samsung Electronics and SK hynix rising 1.34% and 1.90%, respectively. Other notable performers included LG Energy Solution (5.56%), Hanwha Aerospace (5.89%), KB Financial Group (1.02%), Shinhan Financial Group (1.49%), and HD Hyundai Heavy Industries (0.97%). Additionally, the Bank of Korea raised its 2026 growth forecast to 3.3% from 2.6%, citing stronger-than-expected semiconductor exports and a robust economic recovery. However, the central bank also raised its benchmark interest rate by 25 basis points to 3%, marking a second consecutive hike amid persistent inflationary pressures.