Stock prices in Seoul decrease for the third consecutive day, driven by concerns about an AI bubble; South Korean currency weakens significantly
The Korean stock market experienced a decline on Thursday, with the benchmark Korea Composite Stock Price Index (KOSPI) closing at 3,130.09, a decrease of 0.63 percent. This follows a similar trend seen in global markets overnight, where the Nasdaq composite closed 1.46 percent lower, and the S&P 500 shed 0.59 percent.
Losses were widespread in the Korean market, with losers outnumbering winners 643 to 241. Notable declines were seen in Naver, which dropped 1.77 percent to 221,500 won, and SK hynix, a chip giant, which slid 2.85 percent to 255,500 won. LG Energy Solution, another leading battery maker, lost 1.69 percent to 377,500 won.
The technology sector was not immune to the selling pressure, with AI chip giants Nvidia, AMD, and TSMC experiencing losses of 3.5 percent, 5.44 percent, and 3.61 percent, respectively. The decline was partly attributed to investor sentiment being dampened by concerns over a possible bubble in the artificial intelligence sector.
The automotive, machinery, and electronics sectors were particularly affected by production declines and losses, as reported by large companies from sectors including clinics, textile retail, automotive suppliers, and chemical industries on September 3. This financial damage has also affected their suppliers.
The shipbuilding sector showed weakness due to concerns about competition with Chinese firms, according to Seo, while defense shares decreased due to a profit-taking sentiment. Hanwha Aerospace, a defense powerhouse, dipped 1.33 percent to 816,000 won.
Doosan Enerbility, a nuclear power plant builder, dropped 3.53 percent to 57,400 won, with Seo stating that nuclear power shares lost ground due to foreign selling. Samsung Electronics, another chip giant, bucked the trend, gaining 0.71 percent to 70,500 won.
Institutions purchased 516.3 billion won in the Korean stock market, but this was offset by retail and foreign investors selling local shares worth 392.7 billion won and 232.6 billion won, respectively. The local currency was quoted at 1,398.4 won against the greenback at 3:30 p.m., down 7.5 won from the previous session. Trade volume was moderate at 331.7 million shares worth 11.6 trillion won ($8.3 billion).
Heightened caution precedes the Jackson Hole economic policy symposium, where Federal Reserve Chair Jerome Powell will speak on Friday (US time). The latest US producer price data showed signs of sticky inflation, which may influence Powell's approach to the economy.
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