KOSPI Slips as Retail Investors Take Profits, Won Surges Most in 3 Years

A classic split decision hit South Korea's financial markets. While retail investors cashed in on recent gains, pushing the stock market lower, the Korean won staged its most dramatic rally in over three years following a strong warning from foreign exchange authorities. The benchmark Korea Composite Stock Price Index (KOSPI) closed down 8.7 points, or 0.21%, at 4,108.62 on Wednesday, snapping a three-day winning streak.

Retail Sells, Foreigners Buy

The dip in the KOSPI was driven by local retail investors, who offloaded a net 717.5 billion won to lock in profits from recent rallies in tech and shipbuilding shares, according to Yonhap News Agency. This selling pressure was absorbed by foreign and institutional investors, who continued their buying spree, purchasing a net 520 billion won and 200 billion won, respectively. Total trade volume was moderate at 351.5 million shares worth 11.95 trillion won (US$8.2 billion).

Won Soars on 'Verbal Intervention'

In stark contrast to the equity market, the Korean won surged against the U.S. dollar. It closed at 1,449.8 won to the greenback, a jump of 33.8 won from the previous session—its biggest single-day gain in over three years. The sharp appreciation came after FX authorities stated that an excessively weak won was "not desirable" and signaled their "strong commitment" to stabilize the market. This intervention comes as the currency has been hovering near a 16-year low in recent weeks.

Mixed Fortunes for Major Stocks

Performance among blue-chip stocks was mixed. Tech giant Samsung Electronics lost 0.36%, but its chipmaking rival SK hynix edged up 0.68%. Automakers had a positive day, with Hyundai Motor gaining 0.7% and Kia climbing 0.68%. However, major shipbuilders, which had rallied previously, lost significant ground. Hanwha Ocean slipped 3.57%, and HD Korea Shipbuilding dipped 3.7%.