FX.co ★ South Korean Stocks Fall on AI Fears

The benchmark KOSPI index declined by 1.72% to approximately 4,020 on Tuesday, continuing its downward trend for the second straight session. This decline comes amid ongoing concerns regarding inflated AI valuations and a fresh sell-off in technology stocks that have dampened investor sentiment. Market participants are now focusing on the government's strategy to infuse over KRW 30 trillion into AI and other key sectors in the upcoming year via the newly established Public Growth Fund. This initiative aims to boost industries like semiconductors, secondary batteries, biotechnology, and future mobility. However, analysts remain cautious, suggesting that the scale of investment may not instantly alleviate market skepticism about the high valuations of tech stocks. Moreover, market sentiment improved following the signing of an enhanced Free Trade Agreement between South Korea and Britain. The agreement reduces the tariff-free threshold for Korean automobiles from 55% to 25%, thereby facilitating easier market entry for car manufacturers. Among the major stocks experiencing declines were Samsung Electronics, which slipped by 0.29%, SK Hynix by 1.90%, LG Energy Solution by 3.62%, Hyundai Motor by 1.70%, and Doosan Enerbility by 2.53%.