SEOUL, June 10 (AJP) - The volatile Seoul market gave ground Wednesday, surrendering part of the previous session's explosive gains as investors locked in profits while renewed military clashes between the United States and Iran rattled global markets.
As of 10:33 a.m., the benchmark KOSPI was down 2.80 percent at 7,870.03, extending losses after slipping below the 8,000-point mark earlier in the session. The junior KOSDAQ edged up 0.27 percent to 970.38.
The Korean won also weakened against the dollar, with the greenback trading at 1,522.70 won, up from the previous session's close of 1,512.1 won, as foreign selling accelerated ahead of SpaceX's highly anticipated Nasdaq debut on Friday.
Technology shares led the decline after the Philadelphia Semiconductor Index fell nearly 2 percent overnight, with Samsung Electronics dropping 4.66 percent to 307,000 won and SK hynix sliding 4.09 percent to 2,124,500 won.
Losses spread across major Samsung affiliates. Samsung Life Insurance fell 4.96 percent, SK Square lost 4.26 percent, Samsung C&T declined 4.08 percent, Samsung Electro-Mechanics dropped 2.23 percent and Samsung Electronics preferred shares slipped 2.06 percent.
The weakness in chip stocks comes as investors increasingly question whether the memory-driven rally that propelled the KOSPI to record highs can be sustained amid mounting global uncertainties and a shift in capital toward new opportunities abroad.
Elon Musk's SpaceX is set to begin trading on Nasdaq on Friday after attracting more than $250 billion in investor demand for what is expected to be the largest initial public offering in history. The company is seeking to raise about $75 billion at a valuation approaching $1.8 trillion.
Market participants said some global funds may be raising cash ahead of the listing by trimming positions in some of this year's biggest winners, including semiconductor shares that have spearheaded gains in South Korea and other technology-heavy markets.
Foreign investors have already sold 24.6 trillion won ($18 billion) worth of KOSPI shares during the first nine trading days of June after unloading 51.5 trillion won in May. The combined 76.1 trillion won selloff represents more than half of the 144.2 trillion won foreign investors have dumped from Korean equities so far this year.
"Investors looking to participate in the SpaceX debut are likely to sell existing winners first," a Seoul-based brokerage official said on condition of anonymity. "Samsung Electronics and SK hynix have been among the market's biggest beneficiaries this year and naturally become sources of liquidity when global funds need cash."
Not all sectors participated in the retreat.
Shipbuilders, battery makers and automakers outperformed as investors rotated into industries perceived as less exposed to the semiconductor cycle. HD Hyundai Heavy Industries gained 3.59 percent, LG Energy Solution advanced 2.14 percent and Hyundai Motor rose 1.41 percent.
Among KOSDAQ heavyweights, Jusung Engineering jumped 7.2 percent. Samchundang Pharm, EcoPro BM, Kolon TissueGene, EcoPro, Wonik IPS, HLB and Rainbow Robotics also posted gains. Reno Industrial was the lone decliner among the major names, falling 2.73 percent.
The selloff followed another volatile session on Wall Street, where technology stocks swung sharply after reports that Iranian forces had downed a U.S. military helicopter and a major data-center project by Crusoe was halted. Investors were also awaiting the release of U.S. consumer inflation data for further clues on the Federal Reserve's interest-rate path.
The Nasdaq Composite plunged more than 3 percent at one point before trimming losses as hopes emerged that Washington and Tehran could still avoid a broader conflict through negotiations.
However, reports of fresh U.S. retaliatory strikes against Iranian targets surfaced before trading began in Seoul, reviving concerns about escalating hostilities in the Middle East and triggering another round of risk-off trading across Asia.
The cautious mood was reflected across regional markets. Japan's Nikkei 225 fell 0.71 percent to 64,952.45, Hong Kong's Hang Seng Index slipped 0.71 percent to 24,392.48 and China's Shanghai Composite Index lost 0.62 percent to 3,985.12.
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