South Korean stocks opened lower on Friday despite overnight gains on Wall Street following the U.S.-Iran ceasefire agreement, as investors adopted a wait-and-see approach amid concerns over a potential re-blockade of the Strait of Hormuz limiting buying interest in large-cap stocks including semiconductors.
The KOSPI was trading at 5,803.28, down 69.06 points (1.18%) from the previous session as of mid-morning, according to the Korea Exchange. The index opened at 5,826.45, down 45.89 points (0.78%), but extended losses and has been fluctuating near the 5,800 level.
Individual investors were net buyers of 38.6 billion won, while foreign investors, who had been net buyers for two consecutive sessions on January 7 and 8, turned to net sellers of 29.5 billion won. Institutional investors also sold 5.6 billion won worth of shares.
Samsung Electronics (005930.KS) and SK hynix (000660.KS), Korea's top two companies by market capitalization, both traded lower. Samsung Electronics fell 5,000 won (2.38%) to 205,500 won, while SK hynix dropped 18,500 won (1.79%) to 1,014,500 won. The two stocks had surged 7.12% and 12.77% respectively the previous day, and the weakness is attributed to profit-taking following the sharp gains.
Other major stocks showed mixed performance. Hyundai Motor (0.59%), LG Energy Solution (1.85%), Samsung Biologics (0.63%), and Kia (1.76%) gained ground, while Samsung Electronics preferred shares (-0.93%), SK Square (-0.69%), Hanwha Aerospace (-2.22%), and Doosan Enerbility (-0.59%) declined.
Investors appeared to have turned cautious following news of a potential re-blockade of the Strait of Hormuz, contrasting with the sharp gains on U.S. markets overnight. After U.S. President Donald Trump officially announced the ceasefire with Iran, the Dow Jones Industrial Average surged 2.85%. The S&P 500 (2.51%) and Nasdaq (2.80%) also posted gains exceeding 2%.
Analysts noted that domestic markets had already priced in the ceasefire news the previous day, which could limit further upside. Concerns remain over uncertainty regarding passage through the Strait of Hormuz, and signs that the ceasefire agreement appeared fragile on its first day.
"Today, the domestic market will see reduced upward momentum as profit-taking from yesterday's surge and war-related news flow during trading hours weigh on sentiment," said Han Ji-young, a researcher at Kiwoom Securities. "However, this is merely a short-term breather, and we won't see a return to the hostile atmosphere of March to early April."
