South Korean stocks experienced a downward trend on Monday, fueled by growing concerns over a potential US government shutdown following a downgrade in Moody’s rating outlook for the United States. The local currency also saw a decline against the US dollar, adding to the unease in the market.
After a day of volatile trading, the benchmark Korea Composite Stock Price Index (Kospi) slipped 0.24 percent, closing at 2,403.76 points. Trading volume remained modest, with 299.3 million shares changing hands, valued at 5.8 trillion won ($4.37 billion). The market witnessed 592 losers compared to 283 gainers. Institutions, however, net purchased 35.5 billion won, while foreigners and individual investors net sold 31.3 billion won and 21.7 billion won, respectively.
The day began on a positive note as the Kospi opened higher, driven by a 3.2 percent year-on-year increase in the country’s exports, reaching approximately $182 billion in the first 10 days of the month. Notably, semiconductor exports saw a 1.3 percent rise, sparking optimism that the prolonged downturn in the industry might be nearing an end.
Investor confidence, however, took a hit following Moody’s decision to downgrade the US rating outlook from “stable” to “negative.” The rating agency cited a political deadlock in Congress over spending as a potential risk to the nation’s fiscal health. With fears of a looming government shutdown if Congress fails to pass a spending plan by Friday, the market exhibited shaky movements.
DS Investment & Securities analyst Yang Hye-jeong noted, “The Kospi is showing shaky movements, unlike the US stock market, which is showing a rebound toward the year’s end.” Despite this, she highlighted the semiconductor sector’s positive trend and suggested that recent improvements in the Nasdaq could signal positive developments for South Korea’s semiconductor industry.
In Seoul, large-cap stocks closed with mixed performances. Market bellwether Samsung Electronics edged down 0.14 percent to 70,400 won, while leading mobile carrier SK Telecom gained 0.6 percent to 50,200 won. Top automaker Hyundai Motor slipped 0.23 percent to 173,300 won, while its smaller affiliate Kia remained flat at 77,000 won.
Notably, the leading battery maker LG Energy Solution advanced 1.09 percent to 415,500 won, while its smaller rival Samsung SDI experienced a 0.71 percent loss, closing at 417,700 won.
The local currency, the won, closed at 1,325.10 against the greenback, down 8.30 won from the previous session’s close. As the market continues to navigate uncertainties surrounding the US government’s financial stability, investors in South Korea remain vigilant, closely monitoring both domestic and international developments that may impact their portfolios.
(Source: Yonhap | The Korea Herald)
