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Seoul Stocks Dip as Investors Await Fed Decision, KOSDAQ Soars 7%

Seoul shares closed lower, ending a three-day winning streak as investors adopted a cautious stance ahead of the U.S. Federal Reserve's rate decision and major corporate earnings reports. The benchmark KOSPI fell 0.81%, while the tech-heavy KOSDAQ index surged over 7% to close above the 1,000-point mark for the first time in more than four years. Analysts noted that positive expectations for semiconductor earnings were already reflected in recent gains, shifting focus to company guidance on future products. Geopolitical tensions and institutional selling also contributed to the mixed market sentiment.

Key Points: Seoul Shares Fall Ahead of Fed, KOSDAQ Surges Past 1,000

  • KOSPI falls 0.81%
  • KOSDAQ surges 7.09% past 1,000
  • Investors await Fed decision, key earnings
  • Geopolitical tensions weigh on sentiment
2 min read

Seoul shares snap 3-day rise ahead of Fed rate decision

South Korean stocks snap 3-day rise amid Fed meeting wait, while KOSDAQ index jumps over 7% to a 4-year high. Key earnings and geopolitics in focus.

"The rosy outlook for fourth-quarter earnings of semiconductor shares have already priced in recent gains. - Han Ji-young, Kiwoom Securities"

Seoul, Jan 26

South Korean stocks closed lower on Monday to snap three consecutive days of rise ahead of a U.S. rate-setting meeting, with investors sitting on the sidelines amid geopolitical uncertainties in Iran.

The Korean won sharply gained against the U.S. dollar, and the tech-laden KOSDAQ surged by more than 7 percent to land above 1,000 for the first time in more than four years, reports Yonhap news agency.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 40.48 points, or 0.81 percent, to close at 4,949.59.

The KOSPI has been enjoying decent gains this year while moving above the 5,000-point threshold since Thursday last week, although the index has not yet closed above the mark.

Trade volume was moderate at 438 million shares worth 22.5 trillion won (US$15.6 billion), with winners far outpacing losers 502 to 391.

Institutions and foreigners sold 158.4 billion won and 1.54 trillion won, respectively, while individuals bought a net 1.71 billion won.

Analysts said investors took a wait-and-see approach to this week's events, such as the Federal Reserve's rate decision and the release of fourth-quarter earnings by major firms, including Samsung Electronics and SK hynix.

Looming geopolitical tensions between the United States and Iran, along with Washington's ambition over Greenland, weighed on investor sentiment as well.

"The rosy outlook for fourth-quarter earnings of semiconductor shares have already priced in recent gains," Han Ji-young, a researcher at Kiwoom Securities, said.

"Investors should focus on companies' conference calls, which will unveil their road map for HBM4 chips and supply of general-purpose memory," Han added.

Top tech giant Samsung Electronics closed unchanged at 152,100 won, while No. 2 chipmaker SK hynix moved down 4.04 percent to 736,000 won.

Leading carmaker Hyundai Motor fell 3.43 percent to 492,500 won, and its sister Kia shed 3.51 percent to 155,200 won.

Financial firms closed lower as well, with KB Financial falling 0.07 percent to 135,500 won and Shinhan Financial decreasing 1.79 percent to 82,400 won.

The secondary KOSDAQ index shot up 7.09 percent to close above 1,000 after more than four years.

- IANS

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Reader Comments

P
Priya S
As someone who invests in global ETFs, this is a good reminder that geopolitical tensions (US-Iran) affect everyone's portfolio, not just local politics. Diversification is key.
R
Rohit P
The semiconductor focus is crucial. South Korea's giants like Samsung and SK hynix are global players. Their performance directly impacts tech sectors worldwide, including in India. Hope our government's semiconductor push learns from their cycles.
S
Sarah B
A respectful criticism: The article mentions "Washington's ambition over Greenland" affecting sentiment but doesn't explain how. A bit more context would help readers connect the dots between seemingly unrelated geopolitical events and stock markets.
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Vikram M
KOSPI above 5000 is a big psychological level, just like Nifty crossing 22k. Shows how global markets often move on similar technical and sentiment factors. The wait-and-see approach before major events is universal investor behaviour.
K
Kavya N
The sharp contrast between KOSPI falling and KOSDAQ surging 7% is fascinating! It shows money rotating within the market. Reminds me of how sometimes our mid/small caps outperform when large caps are flat. Good analysis for retail investors.

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