Concerns about a tariff war were reignited following U.S. President Donald Trump's announcement regarding automotive tariffs, leading to a decline in the domestic stock market on the 27th. The major industries among top market capitalization in the KOSPI and KOSDAQ markets struggled, causing significant index drops, while there was a noticeable influx of capital into political theme stocks.
On this day, the KOSPI index fell by 36.79 points (1.39%) to close at 2607.15. The index started at 2620.28, down 23.66 points (0.89%) from the previous day, briefly recovered to the 2630 range, but fell again in the afternoon, threatening to break below the 2600 line.
In the securities market, institutional investors sold a net 315.3 billion won, dragging the index down. Foreign investors shifted to a net buying position at the end of the session. Individual investors and foreign investors showed net buying advantages of 119.9 billion won and 87.8 billion won, respectively. However, foreign investors sold 641.6 billion won in the KOSPI 200 futures market, applying downward pressure on the index.
Most of the top market capitalization stocks fell. As the imposition of automotive tariffs becomes reality starting from the 3rd of next month, related sectors plummeted. Despite U.S. production facilities, it is anticipated that tariffs on domestic exports will have a damaging impact, causing Hyundai Motor and Kia to drop by 4.28% and 3.45%, respectively. Companies in the automotive value chain, including HL Mando, Hanon Systems, Kumho Tire, and Hankook Tire & Technology, also all experienced declines.
With news of China's advanced semiconductor regulations against the U.S. leading to a sharp drop in Nvidia's stock, the domestic semiconductor sector could not escape the deterioration of investment sentiment. In the securities market, SK hynix fell by around 3%, while rival Hanwha Semiconductor secured additional contracts for semiconductor equipment needed for manufacturing high-bandwidth memory, leading HANMI Semiconductor to fall by 6%. KOSDAQ-listed Techwing and other equipment-related stocks also showed weakness.
On the other hand, Samsung Electronics, which had been struggling in the artificial intelligence (AI) semiconductor business, showed relatively solid performance due to expectations for an improvement in the legacy semiconductor market. Foreign investors bought Samsung Electronics shares for two consecutive trading days. The proportion of foreign investments in Samsung Electronics, which was around 43.8% as of the 3rd of last month, rose to over 50% on this day.
In a situation where there is downward pressure on the domestic stock market, capital flows shifted towards political theme stocks. This is analyzed to be due to the acquittal of Lee Jae-myung, the leader of the Democratic Party, in his appeal trial for violating the Public Election Act the previous day. In the securities market, Orient Bio, Hyungji Elite, and in the KOSDAQ market, Orient Precision Industries and Dongsin Construction saw significant surges.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, "Although Hyundai Motor Group has established facilities capable of producing 1 million completed vehicles annually in the U.S., if the current measures are implemented as they are, there is a high possibility of tariff imposition on domestic production volumes that cannot fully cover last year's sales of 1.7 million units." He added that due to Microsoft's cancellation of its lease and remarks about a bubble from Alibaba's chairman, concerns over oversupply in AI data centers have emerged, resulting in simultaneous adverse factors impacting the automotive and semiconductor industries.
On this day, the KOSDAQ index recorded a drop of 8.99 points (1.25%) to close at 707.49. The KOSDAQ index also started at 710.98, down 5.50 points (0.77%) from the previous day, and closed with increasing losses. Foreign investors and institutions net sold 21.6 billion won and 22.2 billion won, respectively, while individual investors alone net purchased 44 billion won.
In the KOSDAQ market, the declines of top market capitalization stocks, including pharmaceutical and bio-related stocks and the secondary battery sector, were significant. Alteogen, ECOPRO BM, Ecopro, Sam Chun Dang Pharm, and HUGEL all fell. In contrast, media and entertainment stocks, which are relatively free from the tariff issue, showed strength. SME closed on a rising note due to expanded revenue contributions from younger idol groups centered around aespa as well as positive performance projections following its inclusion in DearU.
On this day, the weekly closing exchange rate of the Korean won against the U.S. dollar at the Seoul foreign exchange market (as of 3:30 p.m.) showed a decrease of 1.0 won to 1465.3 won compared to the previous day. The exchange rate jumped to as high as 1471.5 won shortly after opening, recording the highest level since the 3rd of last month (1472.5 won) in terms of weekly intraday transactions.