Investor wait-and-see sentiment continued as the stock market closed lower on the 25th. On that day, the trading volume in the KOSPI market was only around 8 trillion won. The average daily trading volume in the KOSPI market this month was nearly 12 trillion won until the 21st, but it sharply dropped to 7 trillion won on the 24th. The trading also appeared sluggish.
Amid ongoing tariff wars, domestic political uncertainty, and the resumption of short selling, a wait-and-see sentiment continued.
The KOSPI and KOSDAQ indices showed an upward trend in early trading before losing momentum and closing lower. The so-called "strong first, weak later" pattern was repeated. The KOSPI index finished at 2,615.81, down 16.26 points (0.62%) from the previous day. The KOSDAQ index closed at 711.26, down 8.96 points (1.24%) from the previous day.
In the KOSPI market, 579 stocks, including the top two market cap stocks, Samsung Electronics and SK hynix, were in a downturn. There were 305 rising stocks and 56 stocks that remained unchanged. In the KOSDAQ market, there were 1,126 stocks that declined, including the leading stock Alteogen. There were 504 rising stocks and 91 stocks that remained unchanged.
In the KOSPI market, institutions initiated a "buy" position with 679 million won. Foreign and individual investors recorded net sales of 782 million won and 635 million won, respectively. As the exchange rate of the won against the U.S. dollar neared 1,470 won in the Seoul foreign exchange market, foreign investors showed a selling advantage in the KOSPI market after seven trading days. In the KOSDAQ market, individuals and foreigners net purchased 887 million won and 81 million won, respectively. Institutions recorded a net selling of 923 million won.
In early trading, many investors focused on President Donald Trump's remarks regarding the mutual tariffs, which are set to begin on the 2nd of next month, stating that "many countries could receive exemptions." However, President Trump undermined expectations by announcing that tariffs would be imposed on specific items such as pharmaceuticals, automobiles, and semiconductors in the near future.
In addition, President Trump announced an executive order imposing an additional 25% tariff on all countries that import oil and gas from Venezuela. Considering that China purchased 68% of Venezuela's exported oil in 2023, this is essentially a measure to increase the tariff level against China. Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted that "uncertainty remains until substantive measures regarding mutual tariffs take effect."
There is also a view that decreasing tariff concerns may not only act as a boon for emerging markets, including South Korea. It suggests that as worries about the U.S. economy diminish, the flow of funds that had been directed to external markets may return. The U.S. March Standard & Poor's (S&P) services Purchasing Managers' Index (PMI), released overnight, exceeded market expectations, indicating that the U.S. economy remains strong.
Domestic political instability continues. Acting Prime Minister Han Deok-soo has returned to work, while the date for the impeachment ruling regarding President Yoon Seok-yeol has not yet been set. The full resumption of short selling transactions starting the 31st of this month is also a factor that dampens investor sentiment. In particular, the resumption of short selling will be the first in 17 months for KOSPI 200 and KOSPI 150 stocks and approximately five years for all stocks.
Ahead of the complete resumption of short selling, profit-taking sell-offs occurred in sectors that had sharply risen, such as liquefied natural gas (LNG), shipbuilding, and defense. Stocks like POSCO INTERNATIONAL, Hanwha Ocean, and Hanwha System showed significant declines.
In contrast, the automotive and automotive parts sectors were strong due to news of Hyundai Motor Group's large-scale investments in the U.S. Hyundai Motor Group plans to invest $21 billion (about 31 trillion won) in the U.S. from this year until 2028.