The KOSPI index, which had risen for two straight days, closed slightly lower on the 12th. There were concerns that volatility would widen as tensions between the United States and Iran flared up again overnight and the so-called "quadruple witching day," when futures and options on stock indexes and single stocks expire simultaneously, arrived. But the decline was limited thanks to 2 trillion won in net buying by retail investors.
The KOSPI index fell 26.7 points, or 0.48%, from the previous session to close at 5,583.25. The index opened at 5,567.65 and at one point intraday threatened the 5,600 mark, but as foreign selling intensified, it surrendered its gains and finished transactions around 5,580.
Foreign investors were net sellers of 2.3633 trillion won on the day. Following net selling of 200 billion won the previous day, they extended their "sell" stance for a second straight day. The scale also jumped to about 10 times the previous day.
In contrast, individuals and institutions were net buyers of 2.2328 trillion won and 53.9 billion won, respectively, helping to defend against the index's decline. Among institutional investors, investment trusts, which tend to have a long-term investment profile, were net buyers of 75.8 billion won, but brokerages, which include retail exchange-traded fund (ETF) flows, were net sellers of 98.1 billion won.
From early trading, the market was affected by Middle East geopolitical risk. Overnight, news that a Thai-flagged cargo ship was attacked by Iran's Islamic Revolutionary Guard Corps in the Strait of Hormuz led to a mixed close on Wall Street.
Kang Jin-hyeok, an analyst at Shinhan Investment & Securities, said, "As reports emerged of a U.S. previewed airstrike on the Port of Hormuz and Iran's attacks on merchant and oil tankers, foreign investors' risk appetite weakened."
"Quadruple witching day" was also cited as a factor that increased market volatility. Quadruple witching day is when futures and options on stock indexes and single stocks expire on the same day, and as program trading by institutions and foreigners concentrates, the index often swings sharply.
While most large-cap stocks were generally weak, defense and nuclear-related shares were strong. Hanwha Aerospace rose more than 3%, and Doosan Enerbility (2.48%) and Hanwha Systems (3.11%) also gained.
With international oil prices rising, buying also flowed into oil and shipbuilding names. Among shipbuilders, Samsung Heavy Industries surged more than 7%, and HD Hyundai Heavy Industries (2.37%), Hanwha Ocean (2.32%), and HD Korea Shipbuilding & Offshore Engineering (1.19%) also advanced. In oil-related names, POSCO International (4.06%) and GS Holdings (3.97%) showed strength.
The KOSDAQ index rose 11.57 points, or 1.02%, from the previous session to close at 1,148.4. Individuals were net buyers of 507.4 billion won and institutions 252.4 billion won, lifting the index despite foreigners' net selling of 680 billion won.
In the KOSDAQ market, biotech stocks were strong. Aimed Bio climbed more than 7%, and Alteogen (3.47%), Sam Chun Dang Pharm (1.68%), Kolon TissueGene (2.23%), and LigaChem Biosciences (2.28%) rose in tandem.