South Korean Shares Extend Decline

The benchmark KOSPI edged down to around 6,230 on Tuesday, extending losses for a second straight session, as technology heavyweights remained under pressure. Samsung Electronics and SK Hynix both fell more than 3%. Other notable losses included Hyundai Motor (-3.3%), Samsung Electro-Mechanics (-3.6%), KB Financial Group (-0.7%), Kia Corporation (-1.4%), Shinhan Financial Group (-1.6%), and Hyundai Mobis (-5.1%). Meanwhile, South Korea's annual inflation rate eased to 2.8% in July from 3.2% in June, below market expectations of 3.0%, though a pickup in core inflation reinforced expectations that the Bank of Korea will maintain a restrictive monetary policy stance. Investors also monitored developments in the Middle East after US President Donald Trump said talks with Iran on reopening the Strait of Hormuz were underway, while uncertainty over the outcome of the negotiations kept risk appetite in check.

The benchmark KOSPI fell 5.12% to close at 6,257 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 8.95% and 8.56%, respectively. Other notable losses included SK Square (-1.88%), LG Energy Solution (-4.27%), HD Hyundai Heavy Industries (-2.60%), Kia Corporation (-2.20%), Samsung Biologics (-4.71%), and SK Inc. (-7.18%).

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.