South Korean Shares End Lower

The benchmark KOSPI fell 1.55% to close at 6,870 on Tuesday, snapping a five-day rally, as fading hopes for a US-Iran deal prompted profit-taking following a sharp semiconductor-led rally. Foreign investors remained net buyers of Korean equities, while retail investors and institutions sold, suggesting the pullback was driven more by profit-taking than a broad retreat from Korean assets. Samsung Electronics slipped 2.00%, along with notable losses in SK Square (-2.17%), Hyundai Motor (-4.42%), LG Energy Solution (-5.01%), Hanwha Aerospace (-1.29%), Kia Corporation (-3.39%), HD Hyundai Heavy Industries (-4.12%), and Doosan Enerbility (-5.57%). Additionally, renewed uncertainty over the US-Iran agreement pushed oil prices higher and revived inflation concerns, while elevated Treasury yields added to pressure on global risk appetite. Ongoing US-Korea trade negotiations over the planned US$200 billion investment commitment also remained a source of uncertainty for Korean exporters.

The benchmark KOSPI climbed more than 2% to around 7,150 on Tuesday, extending gains to its highest level in a month, led by strong advances in major chipmakers. Samsung Electronics rose nearly 3%, while SK hynix jumped more than 7%, as continued strength in the global semiconductor sector and optimism over AI-related demand supported technology stocks. Notable gains were also recorded in SK Square (7.4%), Samsung C&T Corp. (3.3%), LG Electronics (1.6%), SK Inc (4.8%), and LS Electric Co. (5.1%). Meanwhile, global risk appetite was limited, as the expiration of a 60-day US-Iran agreement without an extension heightened concerns over renewed conflict and disruptions to oil supplies through the Strait of Hormuz, pushing oil prices higher and lifting Treasury yields. At the same time, investors continued to monitor South Korea’s trade negotiations with the US, with Seoul seeking to resolve outstanding issues surrounding its planned US$200 billion investment commitment.

The benchmark KOSPI climbed 2.42% to close at 6,978 on Friday, extending gains to a more than three-week high, as strength in US stocks and semiconductor shares lifted sentiment. The S&P 500 reached a fresh record after US producer prices were unchanged in July, below expectations, easing inflation concerns and reducing expectations for further Federal Reserve tightening. The improved risk sentiment supported Asian technology stocks, with SK hynix jumping 3.26% and Samsung Electronics advancing 2.43%. Other notable performers included SK Square (3.31%), Hyundai Motor (8.24%), LG Energy Solution (1.09%), HD Hyundai Heavy Industries (2.82%), Kia Corporation (3.13%), and Hyundai Mobis (7.05%). Meanwhile, the US imposed a 15% tariff on South Korean drones and components and flagged the country for China-linked transshipment risks, adding a potential headwind for exporters. The KOSPI will be closed Monday for a substitute holiday in place of Liberation Day and will resume trading Tuesday.