Why Are Seoul Shares Dipping Over 2% Amid Tariff Concerns?
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Synopsis
Seoul's financial markets took a hit, with stocks plunging more than 2% due to rising tariff tensions and lowered expectations for U.S. interest rate cuts. Investors are now turning to safer assets as currency values fluctuate. Explore the implications for the South Korean economy and what it means for future trade agreements.
Key Takeaways
- Seoul's stock market saw a decline of over 2%.
- Local currency fell below 1,410 won against the U.S. dollar.
- Foreign and institutional investors led the sell-off, offloading substantial shares.
- The benchmark KOSPI index dropped to 3,386.05.
- Trade tensions continue to weigh on investor sentiment.
Seoul, Sep 26 (NationPress) South Korean stocks experienced a significant drop of over 2 percent on Friday, sliding beneath the 3,400-point threshold for the first time in ten sessions due to intensifying tariff issues and reduced expectations for U.S. rate cuts.
The local currency also fell sharply, breaching the 1,410 won mark against the U.S. dollar for the first time in over four months, as investors sought safer assets, as reported by Yonhap news agency.
The benchmark Korea Composite Stock Price Index (KOSPI) plunged by 85.06 points, or 2.45 percent, to finish at 3,386.05. This marked the first close below the 3,300-line since September 12, when it closed at 3,395.54.
Trading volume was moderate, with 389 million shares changing hands worth 12.2 trillion won (approximately US$8.63 billion), where decliners significantly outnumbered advancers with 776 to 121.
Foreign and institutional investors drove the sharp fall, offloading a net 661.1 billion won and 489 billion won worth of stocks, respectively, while retail investors acquired a net 1.1 trillion won.
Analysts highlighted that the market was heavily affected by statements from U.S. President Donald Trump, who referred to South Korea's planned $350 billion investment as merely “up front”.
“The comment raised doubts about the initial Korea-U.S. trade agreement reached in August,” stated Lee Jae-won, an analyst at Shinhan Securities Co. “Investors are also worried about the trade discussions, which have shown no progress thus far.”
Moreover, stronger-than-expected growth in the world's largest economy has lessened hopes for imminent Federal Reserve rate cuts.
Most shares closed negatively across the board.
Market leader Samsung Electronics fell by 3.25 percent to 83,300 won, while chipmaker SK hynix dropped by 5.61 percent to 336,500 won.
Top automaker Hyundai Motor decreased by 1.15 percent to 214,500 won, and its parts affiliate Hyundai Mobis fell 1.99 percent to 295,000 won.
Pharmaceutical stocks were mixed following a U.S. government announcement of 100 percent tariffs on imported branded drugs. Samsung Biologics fell 2.15 percent to 1 million won, while Celltrion rose slightly by 0.06 percent to 178,000 won.
Hanwha Aerospace, a defense giant, dropped 0.38 percent to 1.04 million won, and leading food company CJ Cheiljedang decreased by 1.5 percent to 230,500 won.
Kakao faced a significant decline, plummeting 6.17 percent to 59,300 won amid rising public dissatisfaction regarding a recent update on its popular messaging app KakaoTalk.
At 3:30 p.m., the local currency was quoted at 1,412.4 won against the greenback, down 11.8 won from the previous session, marking the highest won-dollar rate since May 14, when it was 1,420.2 won.
Point of View
It's essential to understand that while market fluctuations can create uncertainty, they also present opportunities for informed investors. The recent decline in Seoul's stock market reflects broader economic concerns, particularly surrounding trade agreements. Staying informed and adaptable is key in navigating these volatile times.
NationPress
26/09/2025
Frequently Asked Questions
What caused the decline in Seoul's stock market?
The decline was primarily due to escalating tariff issues and diminished hopes for U.S. interest rate cuts, leading investors to seek safer assets.
How did the local currency perform?
The local currency fell sharply, breaching the 1,410 won mark against the U.S. dollar for the first time in over four months.
Which sectors were most affected?
Market bellwethers like Samsung Electronics and SK hynix experienced significant declines, with most shares closing in negative territory.
