KOSPI tumbles 2.15% to 8,599 as profit-taking hits Seoul market
Synopsis
South Korean stocks fell sharply on Tuesday despite record highs on Wall Street, with the KOSPI dropping 2.15% to 8,599 as investors cashed out large-cap positions. The session was further rattled by a deadly factory explosion that forced Hanwha Aerospace to suspend its Daejeon plant — even as Naver Cloud announced a headline AI factory tie-up with Nvidia on the sidelines.
Key Takeaways
The KOSPI fell 188.63 points (2.15%) to 8,599.75 as of 11:20 am on 2 June , driven by broad profit-taking.
Samsung Electro-Mechanics plunged 11.82% ; Hyundai Motor shed 4.93% ; SK Hynix fell 2.59% .
Hanwha Aerospace dropped 6.41% after being ordered to suspend its Daejeon factory following a deadly explosion on Monday.
Naver Cloud CEO Kim Yu-won announced a partnership with Nvidia to build an AI factory, speaking at the Nvidia Cloud Partners Summit in Taipei .
The Korean won weakened to 1,516.25 per US dollar, down 11.95 won from the previous session.
South Korea's benchmark Korea Composite Stock Price Index (KOSPI) fell sharply on Tuesday, 2 June, sliding 188.63 points, or 2.15%, to 8,599.75 as of 11:20 am local time, as investors moved aggressively to book profits in large-cap heavyweights despite a positive overnight session on Wall Street. The sell-off defied fresh record highs on US indices, underscoring the disconnect between global sentiment and domestic positioning in Seoul.
Key Market Movements
Most large-cap shares traded in negative territory. Top automaker Hyundai Motor shed 4.93%, while electronic components maker Samsung Electro-Mechanics plunged 11.82%. Chipmaker SK Hynix fell 2.59%. Market bellwether Samsung Electronics bucked the broader trend, edging up 0.93%.
Hanwha Aerospace Hit by Factory Suspension
Defence firm Hanwha Aerospace retreated 6.41% after the company confirmed it had been ordered to suspend operations at its Daejeon factory following a deadly explosion on Monday. The incident added a company-specific pressure layer on top of the broader profit-taking wave, weighing on the defence sector's recent outperformance.
Wall Street Rally Driven by Nvidia Surge
Overnight in the US, major indexes reached fresh record highs, lifted by a tech rally. Nvidia surged more than 6% after Chief Executive Officer Jensen Huang unveiled a new AI processor designed to run local agentic AI applications on personal computers. The chip giant's gains, however, failed to translate into sustained buying momentum in Seoul.
Naver Cloud Partners with Nvidia on AI Factory
In a notable development on the sidelines, Naver Cloud Chief Executive Officer Kim Yu-won announced a partnership with Nvidia to build an artificial intelligence factory. Speaking at the Nvidia Cloud Partners Summit in Taipei, Kim said: 'Naver Cloud holds 'full-stack' technical capabilities encompassing all areas spanning from AI infrastructure to services. We are a partner that fits with Nvidia's AI factory platform strategy, which includes energy, chips, infrastructure, application and models.' An AI factory refers to next-generation infrastructure designed to train and run large-scale AI models for real-world industrial deployment. Huang is separately scheduled to visit Seoul later this week.
Currency and Oil
The Korean won weakened to 1,516.25 won against the US dollar as of 11:20 am, down 11.95 won from the previous session. Oil held gains as US President Donald Trump said talks with Iran were progressing rapidly, even as Washington struggled to advance a peace framework. The geopolitical overhang added a layer of uncertainty to global commodity markets.
With Huang's Seoul visit imminent and the Naver-Nvidia AI factory deal in motion, the technology narrative around South Korea remains constructive — but Tuesday's session makes clear that near-term profit-taking pressure can override even the most bullish macro cues.
Point of View
Company-specific shock, but its timing amplified the negative sentiment. More telling is the Naver-Nvidia AI factory announcement: it signals that South Korean tech is positioning aggressively in the AI infrastructure race, yet the market chose to sell rather than buy the news. That gap between strategic ambition and near-term price action is worth watching as Jensen Huang arrives in Seoul this week — his visit could either reignite the rally or confirm that the easy momentum trade has run its course.
NationPress
22 Jul 2026
Frequently Asked Questions
Why did the KOSPI fall on 2 June 2025?
The KOSPI fell 188.63 points, or 2.15%, to 8,599.75 primarily due to widespread profit-taking in large-cap stocks, even as US markets hit fresh record highs overnight. Investor sentiment was further dented by the Hanwha Aerospace factory suspension following a deadly explosion.
Which stocks fell the most on the Seoul market on Tuesday?
Samsung Electro-Mechanics was the biggest loser, plunging 11.82%, followed by Hyundai Motor down 4.93%, Hanwha Aerospace down 6.41%, and SK Hynix down 2.59%. Samsung Electronics was a rare gainer, edging up 0.93%.
Why was Hanwha Aerospace ordered to suspend its Daejeon factory?
Hanwha Aerospace confirmed it was ordered to suspend operations at its Daejeon factory after a deadly explosion occurred there on Monday. The company-specific shock contributed to its 6.41% share price decline on Tuesday.
What is the Naver Cloud and Nvidia AI factory deal?
Naver Cloud CEO Kim Yu-won announced at the Nvidia Cloud Partners Summit in Taipei that the South Korean company will partner with Nvidia to build an AI factory — next-generation infrastructure for training and deploying large-scale AI models. Nvidia CEO Jensen Huang is scheduled to visit Seoul later this week.
How did the Korean won perform on 2 June?
The Korean won weakened to 1,516.25 per US dollar as of 11:20 am on 2 June, down 11.95 won from the previous session, reflecting broader risk-off sentiment in the South Korean market.
