On Tuesday, the benchmark KOSPI index experienced a decline of 0.2%, settling around 3,203 and undoing the gains seen in the previous session. This downturn was attributed to investor caution as concerns mounted over increasing producer inflation. Specifically, South Korea's producer price index rose by 0.5% year-over-year in June, halting a four-month trend of deceleration. This development has sparked worries about elevated input costs potentially impacting corporate profit margins, especially for exporters and manufacturers that play a significant role in the index.
In parallel, trade negotiations with the United States have reached a critical juncture. Finance Minister Koo Yun-cheol and Trade Minister Yeo Han-koo are scheduled to engage with their U.S. counterparts in a "2+2" meeting set for this Friday, highlighting the high-stakes focus on tariff discussions. Following a meeting on pressing economic issues, Koo emphasized that "relevant ministries have joined forces to devise a cohesive and practical strategy aimed at protecting the national interest."
On the corporate side, significant declines were noted in companies such as SK Hynix, which dropped by 1.5%, Hanwha Aerospace, down by 0.2%, Doosan Enerbility, which plunged by 4.1%, and KB Financial Group, which decreased by 0.4%.
