On the 4th, the KOSPI index retreated to the 2460 level after fluctuating. Despite the resolution of political uncertainty following the impeachment of former President Yoon Suk-yeol, foreign investment funds significantly exited due to concerns over tariffs from U.S. President Donald Trump. Foreign investors sold off more than 1.8 trillion won in net sales in just one day, the largest amount since August 2021.
The KOSPI index closed down 21.28 points (0.86%) to 2465.42 compared to the previous trading day. The index started at 2450.49, down 36.21 points (1.46%) from the previous session, showing high volatility. At one point in the morning, it exceeded the 2500 mark, but in the afternoon, it yielded down to the 2440 range.
The decision to impeach the president shocked the stock index amid the ongoing tariff shock from the United States. In particular, at 11:15 a.m., when the Constitutional Court pointed out the violation of the substantial requirements for the emergency martial law declared by former President Yoon, the KOSPI rose to 2506.71.
After the final decision of former President Yoon's impeachment at 11:22 a.m., the index immediately turned bearish, and the drop increased. Although both individuals and institutions engaged in buying following the resolution of the political uncertainty that had suppressed the domestic stock market, foreign investors continued a selling trend, leading to the index's decline.
On this day, foreign investors net sold stocks worth 1.8095 trillion won in the securities market (KOSPI). This is the largest amount in over three years and seven months since August 13, 2021, when 2.6988 trillion won in selling pressure emerged due to fears of a resurgence of COVID-19. Individuals and institutions net purchased stocks worth 1.1 trillion won and 400 billion won, respectively.
Seo Sang-young, a researcher at Mirae Asset Securities, noted, "Foreign investors viewed tariff anxiety as a greater issue than the resolution of political uncertainty following the impeachment ruling," adding that "since South Korea has a high export dependence, concerns about growth remain given Trump's proposed universal tariff of 10%."
The sharp decline in the U.S. New York stock market also seemed to stimulate foreign investors' risk-averse sentiment. In the previous night's New York stock market, the Dow Jones Industrial Average fell 3.98%, the Standard & Poor's 500 index dropped 4.84%, and the Nasdaq Composite Index plummeted 5.97%.
By sector, semiconductor stocks such as Samsung Electronics, the KOSPI leader that has driven recent KOSPI rises, all showed weakness. This was attributed to concerns over potential semiconductor tariffs following President Trump's remarks on reciprocal tariffs.
The sharp fall of tech stocks amid concerns about an economic recession in the U.S. also had a negative impact. The high tariffs of the Trump administration are expected to trigger retaliatory tariffs and escalate the trade war, raising worries that this will impact the U.S. economy, as the Philadelphia Semiconductor Index plummeted nearly 9.88%.
Defense stocks and reconstruction stocks for Ukraine also showed weakness. There are concerns that the government partnerships will weaken due to the fallout from President Yoon Suk-yeol's impeachment. Immediately, Poongsan's stock price fell by more than 5%, and the stock prices of Hyundai Rotem, HD Hyundai Construction Equipment, and JUNJIN Construction Robot also declined.
Gaming stocks showed strength. This is due to the influence of games being classified as a tariff-free zone after Trump's tariff remarks, resulting in KRAFTON's stock price rising over 5%. NCSOFT's stock price also increased. Moreover, retail stocks such as Lotte Shopping also performed well, buoyed by expectations for domestic activation pledges in the early election phase.
On this day, the trading volume in the securities market was recorded at 690.37 million shares, with a transaction value of 10.6931 trillion won. Among the 939 stocks, 4 stocks (Sunny Electronics, Chin Yang Chemical, Pyung Hwa Holdings, and Wolvis) hit the upper price limit, while 562 stocks rose and 330 stocks fell. There were no lower price limits.
The KOSDAQ index closed up 3.90 points (0.57%) to 687.39 compared to the previous trading day. After starting at 677.23, down 6.26 points (0.29%) from the previous session, the index rose thanks to bargain buying by institutions and individuals. Institutions net purchased 74.2 billion won, while foreign investors net sold 8.57 billion won.
By stock, a red light was shown for most of the large-cap stocks in the KOSDAQ market. An analysis suggested that the tariff impact on battery cells may be limited, leading to a surge in the stock prices of secondary battery stocks positioned in the KOSDAQ market, such as Ecopro and ECOPRO BM.
With expectations for a regime change due to President Yoon Suk-yeol's impeachment and improvements in relations with China, the stock prices of entertainment companies such as SME and JYP Entertainment rose. Additionally, the stock prices of HUGEL, Sam Chun Dang Pharm, and Kolon TissueGene also increased, while Alteogen and Rainbow Robotics saw declines.
In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1434.1 won, down 32.9 won from the previous trading day. With the political uncertainty alleviated due to the impeachment ruling, the pressure of won depreciation is understood to have eased. Recovery in consumer sentiment also played a positive role.
Lee Kyung-min, a researcher at DAISHIN SECURITIES, noted, "Compared to the nearly 3% drop in the Japan Nikkei 225 index and the almost 4% drop in the Vietnam Ho Chi Minh VN index, the domestic stock market showed a smaller decline due to the alleviation of political uncertainty," adding that "if foreign demand recovers, the domestic stock market will show relative strength."