On the 28th, the KOSPI closed down 0.5%. As military clashes between the United States and Iran continued and Shin Hyun-song, the new Bank of Korea governor, mentioned the possibility of a future base rate hike, investor caution deepened. In particular, the KOSPI plunged more than 4% intraday, briefly falling to the 7,800 level.
The KOSPI finished at 8,185.29, down 43.41 points (0.53%) from the previous trading day. After opening at 8,165.73, down 62.97 points (0.77%) from the day before, the KOSPI at one point during the session plunged more than 4%, sliding to the 7,840 level. However, it pared a significant portion of its losses in the afternoon.
Foreign selling continued. On a combined basis for the Korea Exchange (KRX) and NEXTRADE (NXT), foreigners posted a net sale of 3.7 trillion won in the main board, while individuals were net buyers of nearly 4.6 trillion won. Institutions also recorded a net sale of 1 trillion won, with investment trusts selling the most at 650 billion won.
Large-cap semiconductor stocks that had recently surged took a breather. Samsung Electronics fell 2%, and SK hynix also stayed around flat. Meanwhile, Samsung Electro-Mechanics and LG Innotek, buoyed by expanding AI investments, climbed about 13% and 8%, respectively. Kakao, hit by news that labor-management talks collapsed, fell to 38,500 won intraday, bringing the share price back to where it was a year ago.
The KOSPI, which had moved slightly lower early in the session, plunged around noon on news that Iran attacked a U.S. military base in the Middle East. According to Iranian state media, at about 4:50 a.m. local time, the Islamic Revolutionary Guard Corps said it conducted a targeted strike on a U.S. Air Force base. The Guards said it was in retaliation for a U.S. airstrike earlier in the morning toward Bandar Abbas in southern Iran.
Signals from the Bank of Korea at the the Bank of Korea's monetary policy committee meeting held that day, strongly hinting at the possibility of a future base rate hike, also added to market pressure. Some members of the Monetary Policy Board voiced support for a rate hike, and the policy statement for the monetary policy stance, for the first time, explicitly mentioned the possibility of raising the base rate going forward.
As the Monetary Policy Board outcome was read as hawkish, bond yields jumped. According to the Seoul bond market, as of 1:30 p.m., the three-year Treasury yield rose 8.2 basis points from the previous day to 3.799%. Intraday, it climbed to as high as 3.808%. The 10-year Treasury yield also surged 10.8 basis points to 4.215%, at one point hitting 4.222%.
Lee Kyung-min, a researcher at Daishin Securities, said, "With expectations for U.S.-Iran cease-fire talks priced in, news of military clashes pushed oil prices higher," and noted, "As Bank of Korea Governor Shin Hyun-song hinted at the possibility of raising the base rate at an appropriate time going forward, risk appetite weakened."
The KOSDAQ finished at 1,104.36, down 28.77 points (2.54%) from the previous trading day. It fell more than 5% intraday, sliding to the 1,060 level, but trimmed some losses in the afternoon to recapture the 1,100 level. Foreigners were net buyers of 310 billion won, but institutions sold a net 380 billion won, dragging the index lower.
Among top stocks by market capitalization, declines were pronounced in biotech names. Kolon TissueGene fell 6.33%, while Alteogen and ABL Bio dropped 4.40% and 3.38%, respectively.
Meanwhile, the possibility that the National Pension Service will adjust its domestic stock weighting is also cited as a factor weighing on the market. The fund management committee of the National Pension Service will hold its fifth meeting in the afternoon to review the 2027–2031 asset allocation plan. As of the previous day, the domestic stock weighting had risen to 29.7%, about 14 percentage points above the target weight of 14.9%.