The South Korean stock market has seen a downturn over the past four consecutive sessions, with a decline nearing 140 points, constituting a 5.6 percent fall. As a result, the KOSPI index is now positioned slightly above the 2,360 mark and faces potential further declines come Tuesday.
The outlook for Asian markets appears subdued, primarily due to the underperformance of technology stocks and anticipation of significant U.S. inflation data scheduled for release later in the week. While European markets showed mixed performances, U.S. markets ended on a downward trend, suggesting that Asian markets might experience a split reaction.
On Monday, the KOSPI experienced a notable decline, with widespread market weakness, driven by investor anxiety regarding the political instability in South Korea. This unrest revolves around President Yoon Suk Yeol, who could face another impeachment attempt following a previous one that was unsuccessful.
Specifically, the index dropped by 67.58 points, equating to a 2.78 percent decrease, closing at 2,360.58 after fluctuating between 2,360.18 and 2,399.52 throughout the session. The market saw a trading volume of 583.08 million shares, amounting to a value of 9.84 trillion won, with 865 stocks declining and only 60 advancing.
Among the actively traded stocks, Shinhan Financial fell by 1.17 percent, KB Financial by 2.93 percent, Hana Financial dropped sharply by 5.92 percent, Samsung Electronics decreased by 1.29 percent, and Samsung SDI fell significantly by 4.77 percent. Other notable movements included LG Electronics down by 2.23 percent, SK Hynix rising by 1.08 percent, and substantial losses by LG Chem at 7.50 percent, and Lotte Chemical at 5.53 percent. SK Innovation and POSCO Holdings both saw declines upwards of 4 percent, while Hyundai Mobis managed a rally with a 2.53 percent increase.
Negative sentiment from Wall Street added to the downward trajectory as the key indices started mixed on Monday before turning negative and maintaining those levels through the session’s close.
The Dow Jones Industrial Average slipped by 240.59 points, or 0.54 percent, to settle at 44,401.93. Meanwhile, the NASDAQ Composite fell by 123.08 points, or 0.62 percent, concluding at 19,736.69, and the S&P 500 dipped by 37.42 points, or 0.61 percent, closing at 6,052.85.
A significant factor contributing to the U.S. market slump was the performance of Nvidia, a prominent player in the AI sector, which declined by 2.6 percent following reports of a Chinese regulatory investigation into potential antitrust violations.
The weakness on Wall Street can also be attributed to anticipation surrounding upcoming critical U.S. inflation data. Although the Federal Reserve is broadly expected to implement an additional 25 basis points rate cut next week, there remains uncertainty concerning continued rate cuts in the forthcoming year.
In contrast, oil prices saw an upward movement, driven by geopolitical concerns and the expectation that China's central bank may ease monetary policy to stimulate economic growth. West Texas Intermediate Crude oil futures for January finished higher, increasing by $1.17, or 1.74 percent, to $68.37 per barrel.
