Seoul Stocks Open Sharply Lower on U.S. Tech Losses, Fed Caution

SEOUL — Seoul stocks opened sharply lower on Thursday, pressured by an overnight retreat in U.S. stocks, particularly a steep decline in semiconductor shares, as investors assessed fresh remarks from Federal Reserve Chairman Kevin Warsh. The benchmark Korea Composite Stock Price Index (KOSPI) initially lost 370.31 points, or 4.46 percent, to 7,933.1 in early trading, before paring some losses, according to Yonhap News Agency.

By late Thursday morning, the KOSPI had trimmed its decline to 235.04 points, or 2.8 percent, at 8,068.37 as of 11:20 a.m., according to a separate Yonhap report. The market's sharp drop triggered a sell-side sidecar by the Korea Exchange (KRX) around 9:07 a.m., halting program trading for five minutes. A sell-side sidecar is activated when the KOSPI 200 Futures index falls 5 percent or more for at least one minute. The index had plunged nearly 7 percent before 10 a.m. amid heavy foreign selling, but institutional and retail investors stepped in to buy, helping the market recover some of its losses.

Coverage Comparison

Both reports from Yonhap News Agency, published on July 2, agree on the key drivers: U.S. stocks retreated overnight, with the S&P 500 slipping 0.2 percent and the tech-heavy Nasdaq 100 falling 1.5 percent. The Philadelphia Semiconductor Index, a key gauge of chip stocks, tumbled 6.3 percent, pressuring Korean chipmakers. Samsung Electronics declined 4.29 percent, while SK hynix lost 5.2 percent, as reported in one of the articles.

The two reports differ in their focus on the market's trajectory. One, published earlier in the session, emphasizes the sharp opening drop and the extent of the KOSPI's loss. The other, reporting later, highlights the market's partial recovery, noting that the KOSPI pared earlier losses and traded nearly 3 percent lower late Thursday morning.

Both articles attribute the market's decline to the U.S. tech selloff and remarks from Federal Reserve Chair Kevin Warsh. One report notes that Warsh said inflation expectations and inflation risks have eased in recent weeks, which it says dampened hopes for a July interest rate cut. The other report frames the same remarks as "bolstering hopes for a delay in interest rate hike." Investors also remained cautious over the latest developments in U.S.-Iran talks, as the two sides concluded another round of indirect negotiations on Wednesday without any clear signs of progress toward lasting peace.

Key Claims

  • The KOSPI opened sharply lower, initially losing 370.31 points, or 4.46 percent, and later trading 235.04 points, or 2.8 percent, lower as of 11:20 a.m., as reported by Yonhap.
  • The Korea Exchange activated a sell-side sidecar on Thursday morning, halting program trading for five minutes due to the sharp drop.
  • U.S. stocks retreated overnight, with the S&P 500 slipping 0.2 percent, the Nasdaq 100 falling 1.5 percent, and the Philadelphia Semiconductor Index tumbling 6.3 percent, according to both Yonhap reports.
  • Federal Reserve Chair Kevin Warsh said inflation expectations and inflation risks have eased in recent weeks, a claim carried by both reports.
  • Hanwha Group affiliates outperformed the broader market after Hanwha Ocean was selected as the preferred bidder for the Navy's 7.8 trillion-won (US$5.1 billion) next-generation destroyer project. Hanwha Aerospace jumped 7.79 percent, while shipbuilder H (the latter cut off in the report).
  • Investors remained cautious over the latest developments in U.S.-Iran talks, according to Yonhap.