As concerns over the imposition of mutual tariffs by the United States grew, the resumption of short selling added to the negative sentiment, causing the KOSPI index to falter. On the 31st, the KOSPI index plunged 3%, falling below 2,500 points for the first time in nearly two months. Samsung Electronics, the largest company by market capitalization in the domestic stock market, fell by 3%, while SK hynix, the second largest, dropped more than 4%.
On that day, the KOSPI index closed at 2,481.12, down 76.86 points (3.00%) from the previous trading day. This marks the first time the KOSPI index has fallen below 2,500 points since the 10th of last month.
Foreign investors sold a net 1.5794 trillion won in the securities market alone, with individuals (795.1 billion won) and institutions (661.3 billion won) purchasing this volume.
Among the top 30 stocks by market capitalization in the securities market, all except KB Financial (0.38%) closed lower. Samsung Electronics dropped 3.99%, SK hynix fell 4.32%, LG Energy Solution declined 6.04%, and Samsung Biologics decreased by 3.34%.
This trend is interpreted as a result of overlapping negative factors. The first negative factor is the mutual tariffs that the United States has announced it will impose indiscriminately on its trading partners. U.S. President Donald Trump, speaking with reporters aboard Air Force One on the 30th (local time), noted, "(The mutual tariffs will) start with all countries" and stated, "I have not heard that it will be imposed on 10 or 15 countries first."
In the New York stock market, related concerns have already been reflected. On the 28th, just before the weekend, the S&P 500 index fell by 112.37 points (-1.97%) to close at 5,580.94, while the technology-focused NASDAQ index dropped by 481.04 points (-2.70%) to finish at 17,322.99.
The United States plans to announce mutual tariffs for countries around the world on the 2nd of next month, taking into account tariffs and non-tariff trade barriers against the U.S.
Earlier, President Trump had raised tariffs on China by an additional 10% twice since taking office and imposed a 25% tariff on steel and aluminum. Starting from the 3rd of next month, a 25% tariff will be applied to automobiles and their key parts, which account for the largest share among exports from our country to the U.S.
The second negative factor is the resumption of short selling in the domestic stock market. Short selling is an investment technique that involves borrowing stocks to sell and then purchasing them back when the stock price has dropped. In November 2023, the government announced a complete ban on illegal short selling, which occurred without borrowing.
At that time, the government announced it would prevent short selling until the end of March 2025, but just then, the issue of mutual tariffs in the U.S. arose. The timing of the resumption of short selling was unfortunate.
As a result, the KOSDAQ index closed at 672.85, down 20.91 points (3.01%) from the previous trading day.
In the KOSDAQ market, foreign investors sold a net 216.1 billion won, while institutions purchased 147.4 billion won and individuals bought 59.9 billion won.
Among the major stocks in the KOSDAQ market, Alteogen (0.99%), LigaChem Biosciences (0.85%), and SME (0.28%) rose, while ECOPRO BM (-7.05%), HLB (3.67%), and Ecopro (-12.59%) fell.
By sector, gas utilities (1.31%) and non-ferrous metals (0.48%) ended higher, while electric products (-6.08%), life science tools and services (-5.37%), and chemicals (-5.18%) closed lower.
On that day, the foreign exchange market in Seoul saw the won close at 1,472.9 won against the U.S. dollar, up 6.4 won from the previous trading day.