South Korean stocks saw a decline on Monday morning as major chip shares faced losses despite reduced tensions in the Middle East. The benchmark Korea Composite Stock Price Index (KOSPI) opened 1.73 percent higher but later dropped by 0.83 percent to 6,634.99 by 11:20 a.m. Foreign investors sold nearly 1.7 trillion won, offsetting buying activities by retail and institutional investors.
The United States has halted its attacks on Iran, easing military tensions that had escalated over the past two weeks. Iran, in turn, ceased counterattacks and engaged in discussions with Oman regarding the Strait of Hormuz. In San Francisco, South Korean and U.S. tech firms agreed on pursuing cooperation projects valued at a total of US$950 billion during an AI summit hosted by the South Korean government.
However, in Seoul, tech shares experienced a decline. Samsung Electronics, the top-cap company, fell by 0.6 percent, while SK hynix dropped by 0.8 percent. Samsung Electro-Mechanics, an affiliate of Samsung Electronics, saw a 1.06 percent decrease, and SK Square, the parent company of SK hynix, slumped by 5.59 percent. Leading oil refinery SK innovation plunged by 9.15 percent, and defence giant Hanwha Aerospace tumbled by 8.17 percent.
The Korean won was trading at 1,468.1 won against the U.S. dollar by 11:20 a.m., marking a 9.6 won decline from the previous session. Notably, South Korea’s chipmaking sector contributed over 10 percent to the country’s manufacturing output in 2024, driven by the increasing demand for AI infrastructure following the emergence of ChatGPT, as per a report by the Bank of Korea (BOK).
