The KOSPI, which had hit record highs for three consecutive trading days, is trading flat on Friday as geopolitical tensions in the Middle East flare up again. Shares of major semiconductor firms including Samsung Electronics (005930.KS) and SK hynix (000660.KS) are weakening, while defense stocks such as Hanwha Aerospace (012450.KS) are rallying.
According to the Korea Exchange, the KOSPI stood at 6,459.44 as of 10:05 a.m., down 16.37 points, or 0.25%, from the previous session. The index closed above 6,470 the previous day, marking a third straight record high, but is moving within a narrow range on Friday.
The move is attributed to an overnight decline across Wall Street as Middle East geopolitical risks reignited. U.S. President Donald Trump ordered the sinking without hesitation of any vessel laying mines in the Strait of Hormuz, reaffirming that the U.S. blockade of the strait would continue until Iran agrees to end the war and denuclearize. Trump also issued a statement announcing a three-week extension of the ceasefire between Israel and Lebanon.
Samsung Electronics, which closed 3.22% higher the previous day, has given back much of those gains. The stock was trading at 220,750 won, down 1.67% from the previous session. The share price fell as much as 2% intraday to 220,000 won. SK hynix also rose more than 1% intraday on the back of brokerage target-price upgrades, but has since turned lower.
Most domestic defense stocks are rallying as military tensions in the Strait of Hormuz intensify. Hanwha Aerospace was quoted at 1,469,000 won, up 3.09%. The stock rose as much as 7% intraday. Expectations are also building that specific contract details will be disclosed on the scheduled re-disclosure date for its participation in Spain's self-propelled howitzer modernization program.
Other defense stocks are mostly firm, with Hyundai Rotem (064350.KS) up 3.82%, LIG Nex1 Defense & Aerospace (079550.KS) up 3.93%, and Hanwha Systems (272210.KS) up 1.31%.
"The domestic stock market today is expected to face profit-taking pressure from the start of the session, amid short-term peak fatigue, noise over a potential U.S.-Iran conflict, and weakness in U.S. stocks," said Han Ji-young, an analyst at Kiwoom Securities (039490.KS). "The sustainability of upward revisions to the KOSPI's second-quarter and full-year operating profit consensus following the first-quarter earnings season will determine the strength of any further leg up in the index."
