FX.co ★ South Korea Shares Fall on Export and Policy Pressures

The benchmark KOSPI index fell by 0.23%, closing at 3,175 on Friday. This decline marked a pullback from the recent gains observed in prior sessions, as key exporters cautioned that they anticipate a sharp drop in profits for the second half of 2025. This is largely attributed to escalating costs and weak export prices. A survey conducted by the Federation of Korean Industries revealed widespread pessimism among exporters in the auto parts, machinery, petrochemicals, and steel sectors, whereas optimism persisted within the semiconductor and shipbuilding industries. Externally, the United States is prompting South Korea to support efforts aimed at curbing China's shipbuilding sector, positing it as a precondition for enhancing broader bilateral cooperation. This diplomatic maneuver places additional pressure on South Korea as it navigates its strategic trade interests. Domestically, policymakers face challenges in invigorating economic growth, balancing the risk of market overheating from interest rate cuts against the potential stagnation from maintaining a tight monetary policy. On the corporate sphere, notable losses were recorded by SK Hynix (-1.0%), Samsung Biologics (-1.9%), and Hanwha Aerospace (-5.6%), while Hyundai Motor's performance remained flat.