South Korean stocks ended a turbulent week lower on Sept 4, as a sharp midweek sell-off triggered by escalating US-Iran tensions outweighed gains fuelled by strong exports and easing concerns over US interest rate hikes.
The benchmark Kospi finished at 6,687.21 on Sept 4, down about 1.5% for the week from 6,788.88 on Aug 28. The index gained 0.46% on Aug 31 and another 0.23% the following day before plunging 3.99% on Sept 2, its steepest move of the week. It recovered 0.26% the next day and surged 1.64% on Sept 4.
Chip heavyweights spearheaded the rebound on Sept 4, with Samsung Electronics climbing 2.2% and SK hynix advancing 3.2%, helping the Kospi claw back part of its midweek losses.
However, the rout on Sept 2 proved decisive after renewed US-Iran military clashes pushed crude prices higher, reviving inflation concerns and expectations that the US Federal Reserve (Fed) could tighten monetary policy further. Foreign and institutional investors dumped a combined 3.9 trillion won worth of shares that day, with Samsung Electronics, SK hynix, Hyundai Motor and battery stocks suffering heavy losses.
Sentiment stabilised later in the week as oil-price pressures eased and Fed Governor Christopher Waller signalled that rates could remain unchanged in September if disinflation continued, encouraging foreign and institutional investors to return to Korean equities.
Domestic economic data also provided support. South Korea’s exports jumped 68.7% year-on-year in August to US$98.26 billion, powered by booming demand for artificial intelligence (AI)-related technology and semiconductors.
Further optimism came from Bank of Korea data showing a US$42.08 billion current account surplus in July, the second largest on record and the country’s 39th consecutive monthly surplus, driven largely by strong semiconductor exports.
Overall, the week highlighted a tug-of-war between South Korea’s powerful AI and semiconductor export cycle and external risks from Middle East tensions, oil prices and the Fed’s next rate move.
