South Korean Shares Close Lower

The benchmark KOSPI fell 0.58% to close at 6,955 on Tuesday, reversing from an over one-month closing high in the previous session amid rising inflation concerns and elevated expectations for further Federal Reserve rate hikes. Brent crude climbed above $97 per barrel amid escalating Middle East tensions and concerns over supply disruptions. Iran warned of risks to shipping near the Strait of Hormuz despite an imminent deal with Oman to manage traffic. Among decliners were Samsung Electronics (-0.19%), Hyundai Motor (-2.04%), LG Energy Solution (-3.86%), KB Financial Group (-0.97%), and Kia Corporation (-2.34%). Retail investors sold a net 3.05 trillion won, outweighing combined foreign and institutional buying of 1.29 trillion won. Markets now await Friday’s US inflation report for further clues on the Federal Reserve’s rate path. Meanwhile, renewed optimism over AI investment and strong memory-chip demand continued to underpin semiconductor stocks.

The benchmark KOSPI climbed more than 1% to around 7,095 on Tuesday, touching a three-week intraday high, as renewed optimism over AI-driven semiconductor demand lifted tech stocks. Samsung Electronics and SK hynix rose more than 1% and 3%, respectively. Expectations for stronger memory demand were reinforced by Samsung's 39.4% DRAM market share in Q2 and forecasts of critically tight supply as hyperscalers ramp up AI infrastructure spending. Samsung's planned shareholder-return program also raised expectations for buybacks of its discounted preferred shares. Other notable performers included SK Square (3.0%), Doosan Enerbility (3.3%), SK Inc. (1.2%), and Hanmi Semiconductor (4.8%). Additionally, South Korea's August exports rose 68.7% year-on-year as semiconductor exports surged more than 200%, while Q2 GDP expanded 0.6% quarter-on-quarter. However, escalating Middle East tensions pushed Brent crude higher, raising inflation concerns and the risk of tighter global monetary policy.

The benchmark KOSPI climbed 4.61% to close at 6,995 on Monday, rallying to its highest level since July 23, as gains in semiconductor stocks lifted the index. The PHLX semiconductor index rose 3.38% on expectations that OpenAI’s new GPT-6 Astra model will boost demand for memory chips. Samsung Electronics and SK hynix advanced 5.28% and 7.77%, respectively, while SK Square (7.59%), Hyundai Motor (2.09%), Doosan Enerbility (10.98%), Shinhan Financial Group (3.17%), and HD Hyundai Heavy Industries (2.41%) also posted notable gains. At the same time, South Korea’s exports reached a record $709.4 billion so far this year, already surpassing the 2025 annual record, with semiconductor exports jumping 169.6% in January-August, reinforcing expectations for solid corporate earnings and economic growth. Meanwhile, heightened US-Iran tensions remained a risk, while stronger-than-expected US jobs data increased expectations for a September Fed rate hike and pushed Treasury yields higher.