Kospi Falls 2% on Foreign Selling as Kosdaq Rises 1%; Won Ends at 1,554.9 per Dollar

Power and defense stocks extend gains

Won ends at 1,554.9 per dollar

South Korea’s Kospi closed down more than 2% on July 1 as foreign selling and caution over National Pension Service rebalancing weighed on sentiment. The Kosdaq, by contrast, rose more than 1% as semiconductor equipment makers and some growth stocks gained on the junior market’s 30th anniversary.

According to the Korea Exchange, the Kospi fell 173.07 points, or 2.04%, to 8,303.41. The index tried to reclaim the 8,600 level early in the session, helped by overnight gains in U.S. technology and chip shares, but turned lower as foreign selling intensified. It briefly slipped into the 8,100 range before retail bargain hunting pared some of the losses.

Overnight, U.S. stocks closed broadly higher, led by technology and semiconductor shares. In Seoul, however, investor sentiment was damped by foreign profit-taking and caution over portfolio rebalancing by the National Pension Service, South Korea’s public pension fund. Some brokerages said the fund’s actual selling could be smaller than the market fears.

On the main board, foreigners were net sellers of 1.703 trillion won, while institutions sold a net 70 billion won. Retail investors were net buyers of 1.74 trillion won.

Most large-cap stocks fell. Samsung Electronics dropped 5.84% and SK Hynix lost 3.4%. Hyundai Motor fell 1.52%, LG Energy Solution slid 3.87%, Samsung Life Insurance declined 3.49%, Samsung C&T dropped 7.36%, and SK Inc. lost 8.51%.

A few heavyweights advanced. Samsung Electro-Mechanics rose 0.96%, HD Hyundai Heavy Industries gained 3.89%, Doosan Enerbility added 1.96%, Hanwha Aerospace climbed 9.65%, and Samsung Biologics rose 0.36%.

By sector, power infrastructure and defense-related shares extended their gains. LS Electric jumped 10.71%, Sanil Electric rose 9.64%, LS gained 9.17%, Hyosung Heavy Industries climbed 8.14%, Taihan Cable & Solution advanced 8.55%, Samsung E&A rose 8.61%, and Hyundai Glovis added 7.97%.

The Kosdaq rose 13.17 points, or 1.44%, to close at 929.35. The index traded lower early in the session, then turned higher and held its gains.

On the Kosdaq, foreigners were net buyers of 247 billion won. Institutions and retail investors were net sellers of 124 billion won and 110 billion won, respectively.

Jusung Engineering surged 20.4% on the Kosdaq. PSK rose 7.85%, Simmtech gained 5.78%, and ABL Bio added 2.01%. EcoPro fell 12.76%, EcoPro BM lost 6.88%, HLB dropped 3.46%, LegoChem Biosciences fell 2.74%, and Sam Chun Dang Pharm declined 1.11%.

In Seoul’s foreign-exchange market, the won closed the daytime session at 1,554.9 per dollar, down 5.5 won from the previous trading day.

Kim Yeon-ji, Hankyung.com reporter kongzi@hankyung.com