South Korean Shares Fall Amid Profit-Taking

The benchmark KOSPI fell more than 4% to around 6,300 on Monday, reversing gains from the previous session as investors locked in profits. Profit-taking followed the index's roughly 17% surge on Friday, its biggest one-day gain on record, with heavyweight chipmakers giving back part of their sharp gains. Meanwhile, Morgan Stanley upgraded South Korean equities to overweight, saying the recent leverage-driven selloff was largely technical and projecting 36% upside for the KOSPI. Separately, US President Donald Trump called off a planned strike on Iran, which pushed oil prices lower and offered some support to market sentiment. Technology heavyweights led the decline, with Samsung Electronics and SK Hynix falling more than 7% each. Other notable losses included SK Square (-1.1%), LG Energy Solution (-4.4%), HD Hyundai Heavy Industries (-1.0%), Kia Corporation (-3.1%), Samsung Biologics (-3.5%), Naver (-1.9%), and SK Inc. (-4.1%).

The benchmark KOSPI soared 17.91% to close at 6,595 on Friday, rebounding sharply from the previous session as a global technology rally lifted semiconductor stocks. Sentiment improved after Microsoft's stronger-than-expected earnings and robust Azure growth eased concerns over AI spending, fueling overnight gains in US chipmakers and driving sharp advances in Korean heavyweights. Samsung Electronics and SK hynix surged 28.26% and 29.95%, respectively, along with notable gains in SK Square (29.91%), Hyundai Motor (10.54%), Kia Corporation (8.86%), and HD Hyundai Heavy Industries (7.37%). The government announced plans to establish a 20 trillion won sovereign wealth fund to invest in strategic industries, including AI, semiconductors, data centers, and infrastructure. Domestic sentiment was also supported by June industrial production, which rose 2.3%, the fastest monthly increase in six years, led by strong growth in automobile and semiconductor output.

The benchmark KOSPI fell 1.23% to close at 5,594 on Thursday, extending losses to its lowest level since early April as persistent concerns over AI-related spending and valuations continued to pressure technology shares, reversing earlier gains. Investors remained skeptical that massive capital spending on AI infrastructure would generate sufficient returns, with SK Hynix posting further declines despite reporting record quarterly earnings. At the same time, support from stronger-than-expected Samsung Electronics results and fresh government measures to curb leveraged ETF-driven volatility faded as selling resumed. Investors also remained cautious after the Federal Reserve left interest rates unchanged while providing little clarity on the timing of future policy easing. Among heavyweights, SK Hynix dropped 5.64%, alongside losses in Samsung Electronics (-0.72%), SK Square (-6.00%), Samsung Electro-Mechanics (-14.97%), and LG Electronics (-1.66%).