FX.co ★ More Pain Predicted For South Korea Stock Market

On Wednesday, the South Korean stock market concluded a two-day winning streak where it had accumulated nearly 10 points or 0.3 percent. The KOSPI index closed slightly below the 2,845-point mark, facing potential additional setbacks on Thursday.

The global outlook for Asian markets indicates a likely consolidation, specifically within the technology and semiconductor sectors. European and U.S. markets experienced declines, suggesting Asian markets might follow a similar trend.

On Wednesday, KOSPI ended modestly lower due to losses in the industrial and technology sectors, along with mixed results from financial shares. The index dropped by 22.80 points or 0.80 percent, closing at 2,843.29. Trading volume included 534.4 million shares, valued at 13.6 trillion won. There were 460 decliners compared to 409 gainers.

Key movements among active stocks included Shinhan Financial climbing 2.28 percent, Hana Financial sliding 0.16 percent, Samsung Electronics falling 1.14 percent, Samsung SDI declining 1.11 percent, and LG Electronics increasing slightly by 0.09 percent. SK Hynix saw a significant drop of 5.36 percent, while Naver gained 1.05 percent. LG Chem decreased by 1.76 percent, both Lotte Chemical and SK Telecom rose by 0.19 percent, S-Oil advanced 0.89 percent, SK Innovation surging 5.65 percent. Conversely, POSCO dropped 2.01 percent, KEPCO dipped 0.05 percent, Hyundai Mobis fell 0.87 percent, Hyundai Motor tumbled 2.19 percent, and Kia Motors declined 1.55 percent, with KB Financial remaining unchanged.

Wall Street presented a mixed scenario: the Dow Jones Industrial Average surged 243.60 points or 0.59 percent, reaching a new record high of 41,198.08, while the NASDAQ saw a significant decline, dropping 512.42 points or 2.77 percent to 17,996.92. Meanwhile, the S&P 500 fell 78.93 points or 1.39 percent to 5,588.27.

The downturn in U.S. markets, particularly the NASDAQ and S&P 500, was primarily driven by semiconductor stocks, which took a hit following reports of the Biden administration considering stricter trade regulations against Chinese chip producers. Additionally, former President Donald Trump's comments suggesting Taiwan should compensate the U.S. for defense, claiming it has monopolized America's chip industry, further dampened market sentiment.

In other economic news, the U.S. Commerce Department reported a significant rebound in new residential construction and building permits in June. Separately, the Federal Reserve announced industrial production in the U.S. had increased more than anticipated in the same period.

Oil prices saw a substantial rise on Wednesday after data showed an unexpected sharp decline in U.S. crude inventories last week, coupled with support from a weaker dollar. West Texas Intermediate Crude oil futures for August surged by $2.09 or 2.6 percent, closing at $82.85 per barrel.