Market Pauses on Tariff Uncertainty…Stablecoin Stocks Surge

The domestic stock market continued its 'wait-and-see’ approach. Major events such as the announcement of mutual tariffs by the United States next week and the government's tax reform plan are scheduled, but the details have yet to be clarified.

Pre-Tariff Storm... Export Stocks Slump Across the Board

On the 25th, the KOSPI Index closed at 3196.05, up 0.18%. During the session, it rose to 3205.82, briefly surpassing the 3200 mark, but gains slowed due to individual selling pressure. Individuals recorded a net sale of ₩461.2 billion on the KOSPI. Foreign investors and institutions bought a net ₩267.1 billion and ₩110.4 billion, respectively. Foreign investors were net buyers of ₩80 billion of defense stock Hyundai Rotem, while institutions bought Doosan Enerbility, a leading nuclear power stock (₩62 billion net purchase), more than any other stock.

Semiconductor and automobile companies, which have high export dependence and are therefore vulnerable to tariffs, struggled. Samsung Electronics fell 0.2% and SK Hynix slid 1.3%. Hyundai Motor Company (-0.5%) and Kia Corporation (-0.9%) also declined.

Meanwhile, shipbuilding companies, floated as a potential card in Korea-U.S. tariff negotiations, mostly closed higher. HD Hyundai Heavy Industries (+5.83%), HJ Shipbuilding & Construction (+5.76%), HD Korea Shipbuilding & Offshore Engineering (+4.89%), and Hanwha Ocean (+1.35%) all advanced.

By sector: machinery & equipment (1.03%), transportation equipment & parts (0.97%), electricity & gas (1.26%), and securities (1.02%) rose, while textiles & apparel (-2.21%), pharmaceuticals (-1.59%), electrical & electronics (-0.50%), and distribution (-0.40%) declined.

Kyungmin Lee, a researcher at Daishin Securities, analyzed, “While foreign investors and institutions simultaneously posted net buying, the index held steady as attention remained on tariff negotiations. With reports of a meeting between the Minister of Trade, Industry and Energy, who is visiting the U.S., and the U.S. Secretary of Commerce, and discussions reportedly held on tariff relief and strengthening cooperation in manufacturing, the market breathed a slight sigh of relief.” He added, “With the deadline rapidly approaching, market caution remains, and the KOSPI only managed a modest rise.”

Investors ‘Wait and See’ Amid U.S. Negotiation Delays... Trading Volume Drops Sharply

Trading volume on the domestic market dropped noticeably. According to Korea Exchange, total trading volume (KOSPI, KOSDAQ, KONEX) on the day was 1,087,977, the lowest since March 24 in four months. On the KOSPI, 385.71 million shares worth approximately ₩9.7686 trillion changed hands, both only 80% of the monthly average up to the previous day.

KOSDAQ trading shrank even further. An average of 702.07 million shares, 76% of the monthly average, were traded up to the previous day. KOSDAQ closed at 806.95, down 0.36% from the day before. In the KOSDAQ market, foreign investors and individuals net bought ₩93.7 billion and ₩74.3 billion, respectively, while institutions net sold ₩144.2 billion.

Jinhyuk Kang, a researcher at Shinhan Investment Corp., noted, “With volatility expected ahead of the U.S. announcement of mutual tariffs and a tax reform draft next week, wait-and-see sentiment has prevailed. Due to uncertainty, there was no aggressive buying.”

A Korea-U.S. 2+2 trade summit scheduled for the day was previously canceled. Some in the financial investment industry predict that negotiations may not be possible before the next mutual tariffs take effect on the first of next month, as Scott Vessent, the U.S. Secretary of the Treasury, is expected to be abroad for meetings on U.S.-China trade and other matters. If no agreement is reached in time, a 25% mutual tariff and 25% automobile tariff will be imposed.

Jiwon Kim, a researcher at KB Securities, remarked, “Market fatigue from recent gains, combined with caution over tariffs and the tax reform plan, resulted in a pause in the market. Investor attention will focus on whether a tariff agreement is reached before next week’s deadline.”

Law Proposal Expectations Send Stablecoin Stocks Higher

Meanwhile, stablecoin-related stocks soared across the board. Me2on jumped to the 6,130 won limit-up (+29.87%). Thezen (+12.31%), Hecto Financial (+11.14%), Kakao Pay (+10.71%), Danal (+9.23%), and ITCEN Global (+6.21%) also ended sharply higher. This rally was due to expectations that a bill on stablecoins could be proposed in the National Assembly next week.

Dogul Ahn, a Democratic Party of Korea lawmaker, stated at a policy forum for stablecoin institutionalization held on the 23rd at the Korea Financial Investment Association in Yeouido-dong, Seoul, “We are preparing to propose a stablecoin bill by organizing a task force with key ministry figures,” and added, “I think we may be able to submit it next week.” Kakao Pay also climbed on news that Goldman Sachs, a global investment bank (IB), reported the previous day that it holds about 8.65 million shares (6.41% stake) in Kakao Pay purely as an investment.

Reporter: Hankyul Sun always@hankyung.com