The South Korean stock market saw a halt in its two-day rally on Tuesday, during which it had gained nearly 20 points or 0.7 percent. The KOSPI now stands just below the 2,665 mark, and further losses are anticipated on Wednesday.
The global economic outlook remains pessimistic, and this negative sentiment is expected to impact Asian markets following substantial declines in both European and U.S. markets.
On Tuesday, the KOSPI experienced a modest decline, driven by downturns in industrial and technology stocks, while financial shares and chemicals had mixed performances. The benchmark index dropped by 16.37 points, or 0.61 percent, landing at a daily low of 2,664.63 after reaching a peak of 2,695.59. Trading volume was significant, with 291 million shares exchanging hands, valued at 8.8 trillion won. The market saw 458 gainers and 416 decliners.
Key performers included Shinhan Financial, which rallied 1.60 percent, while KB Financial dropped 0.80 percent. Hana Financial gained 0.79 percent, Samsung Electronics fell 2.55 percent, and Samsung SDI rose 0.54 percent. LG Electronics saw a 0.39 percent increase, SK Hynix plunged 3.28 percent, and Naver slipped 0.78 percent. In the chemicals sector, LG Chem slumped 2.06 percent and Lotte Chemical surged 2.79 percent. SK Innovation retreated by 1.36 percent, POSCO fell slightly by 0.28 percent, while SK Telecom spiked 2.36 percent, and KEPCO jumped 1.87 percent. Hyundai Mobis declined 1.40 percent, Hyundai Motor fell 3.46 percent, Kia Motors dropped 3.68 percent, and S-Oil remained unchanged.
Wall Street's lead was notably harsh, with key indices opening firmly in the red and deteriorating further as the session progressed.
The Dow Jones Industrial Average plummeted by 626.15 points, or 1.51 percent, to close at 40,836.93. The NASDAQ Composite fell by 577.33 points, or 3.26 percent, ending at 17,136.30, while the S&P 500 tumbled by 119.47 points, or 2.12 percent, to finish at 5,528.93.
The sell-off was precipitated by the Institute for Supply Management's report indicating a continued decline in U.S. manufacturing activity in August, alongside a Commerce Department report that showed an unexpected decrease in U.S. construction spending in July.
Market sentiment was further dampened by uncertainty surrounding the Federal Reserve's interest rate outlook. While a rate cut at the upcoming meeting is widely anticipated, opinions diverge on its magnitude. CME Group's FedWatch Tool indicates a 63.0 percent probability of a 25-basis-point cut and a 37.0 percent chance of a 50-basis-point cut.
Oil prices hit a nine-month low on Tuesday due to concerns over potential oversupply from OPEC. West Texas Intermediate Crude oil futures for October fell sharply by $3.21, or 4.4 percent, to settle at $70.34 per barrel.
