Kospi Drops 1.9% in Early Trade as Oil Jumps, Chip Stocks Retreat

South Korea’s Kospi fell back into the 8,700 range in early trading on June 26 as rising oil prices and profit-taking in semiconductor shares weighed on sentiment.

As of 9:07 a.m., the Kospi was down 170.44 points, or 1.91%, at 8,759.86.

Investor sentiment was dented after global crude prices climbed following a reported attack on a vessel in the Strait of Hormuz. On June 25, the UK Maritime Trade Operations said it had received a report that a cargo ship transiting the Strait of Hormuz near the coast of Oman was suspected of having been attacked.

Brent crude for August settlement closed up 2.06% at $75.26 a barrel on ICE Futures Europe. West Texas Intermediate for August delivery settled 2.25% higher at $71.92 a barrel on the New York Mercantile Exchange.

In the Kospi market, foreigners were net sellers of 646.8 billion won and institutions sold a net 59 billion won as of that time. Retail investors were net buyers of 711.4 billion won.

Samsung Electronics and SK Hynix, the market’s two biggest chip stocks, both declined. Samsung Electronics fell in the 1% range, while SK Hynix dropped in the 2% range, as investors locked in gains after a recent rally.

Most other heavyweight shares also traded lower, including SK Square, Hyundai Motor, Samsung Life Insurance, Samsung Biologics and LG Energy Solution. Samsung Electro-Mechanics and Samsung C&T rose.

The Kosdaq also fell. As of that time, the index was down 18.44 points, or 2.08%, at 869.37. In the Kosdaq market, foreigners were net sellers of 27.3 billion won and institutions sold a net 12.5 billion won. Retail investors were net buyers of 13.9 billion won.

The won-dollar exchange rate opened higher. In Seoul trading, the currency opened at 1,547.30 won per dollar, up 4.6 won from the previous session.

Lee Su, Hankyung.com reporter, 2su@hankyung.com