SEOUL, July 01 (AJP) - South Korean stocks closed the first trading day of the second half in sharply divided fashion Wednesday, with heavyweight chipmakers pulling the KOSPI lower while power-equipment, cable and policy-linked growth stocks rallied on expectations for the Lee Jae Myung administration's mega investment agenda.
The session also marked the 30th anniversary of the KOSDAQ market. Financial Services Commission Chairman Lee Eok-won said at a KOSDAQ anniversary event that authorities would push reforms to help the junior market become a stronger destination for growth-stock investment.
The benchmark KOSPI fell 2.0 percent to close at 8,303.40, after moving between an intraday high of 8,620.15 and a low of 8,143.33. Retail investors bought 1.74 trillion won ($1.12 billion) worth of KOSPI shares, while foreign investors sold 1.70 trillion won and institutions offloaded 70.2 billion won.
Samsung Electronics dropped 5.8 percent to close at 314,500 won, while SK hynix lost 3.4 percent to close at 2,560,000 won. The declines came as investors took profits from recent gains in chip shares following weakness in U.S. technology stocks. Other large-cap KOSPI names also retreated, with LG Innotek falling 7.5 percent to 907,000 won and Samsung C&T losing 7.4 percent to 434,000 won.
The pressure on semiconductors contrasted with a powerful rally in electric-equipment and cable shares, a KOSPI sector that jumped 9.1 percent. Daewon Cable hit the daily upper limit with a 30 percent gain to close at 13,400 won, while LS ELECTRIC rose 10.7 percent to 263,500 won and Gaon Cable surged 28.7 percent to 300,500 won.
Investors continued to bet that the government's planned push into semiconductors, artificial intelligence data centers and physical AI will drive demand for power grids, transformers and transmission equipment. Samsung Group has pledged 2,655 trillion won for chip clusters in Pyeongtaek and Yongin and other regions, while SK Group has unveiled a 2,100 trillion won investment plan for AI data centers and expanded chip capacity.
Kumho Construction also hit the daily limit, rising 30 percent to close at 14,540 won, as investors bet on infrastructure spending tied to the government's investment push.
The tech-heavy KOSDAQ gained 1.4 percent to close at 929.40, after touching as high as 955.45 and as low as 905.87. Foreign investors were heavy buyers of 247.0 billion won on the KOSDAQ, while retail investors sold 108.8 billion won and institutions sold 125.0 billion won.
On the KOSDAQ, Jusung Engineering jumped 20.4 percent to close at 242,000 won, while Ecopro dropped 12.8 percent to close at 93,000 won.
An internet and catalog retail sector on the KOSDAQ rose 7.4 percent, led by Silicon2, which climbed 12.3 percent after NH Investment & Securities forecast record second-quarter earnings on strong demand in Europe and North America, even as the brokerage trimmed its price target on margin concerns tied to the company's expanding roster of overseas retail partners. Gradient rose 2.8 percent after announcing a special dividend and a share buyback-and-cancellation plan funded by proceeds from its sale of a stake in Nol Universe.
Wemade, Minatek and Eugene Corp. each rose by the daily limit of 30 percent on the KOSDAQ, closing at 25,100 won, 107,700 won and 4,275 won, respectively.
Defense and aerospace shares advanced across both markets, with the sector up 8.2 percent. Sphere, listed on the KOSDAQ, rose 20.1 percent, while KOSPI-listed MNC Solution gained 14.6 percent.
A cable theme spanning both markets jumped 17.5 percent, with Daewon Cable up 30 percent and KOSDAQ-listed KBI Metal rising 29.9 percent. Small-cap builders also rallied, with the construction theme up 13.1 percent as KOSDAQ-listed Namhwa Construction and Dongshin Construction both hit their daily upper limits.
Meanwhile, the National Pension Service resumed rebalancing to trim its domestic equity holdings, though the move fell short of the heavy institutional selling some investors had feared. Pension fund Chairman Kim Sung-joo said on social media that a rebalancing-driven "sell bomb" was not a realistic risk.
The won weakened, with the dollar trading at 1,556.60 won, up 0.6 percent from the previous session and marking a third straight day of gains. Bond yields rose in tandem, with the 10-year Treasury yield climbing to 4.205 percent and the 30-year yield rising to 4.437 percent, as traders said the currency and rates markets could see further volatility heading into the third quarter ahead of this week's U.S. jobs report and signals on Federal Reserve policy.
Across Asia, Japan's Nikkei 225 rose 0.6 percent to close at 70,475, even as Kawasaki Heavy Industries fell more than 7 percent on a Reuters report that the company was finalizing a roughly 200 billion yen ($1.23 billion) fundraising plan combining new shares and convertible bonds. China's Shanghai Composite added 0.4 percent to 4,112.50. Hong Kong markets were closed for the Hong Kong Special Administrative Region Establishment Day holiday.
Oil prices were little changed, with Brent crude holding above $73 a barrel following its steepest quarterly decline since 2020. Traders were awaiting updates from U.S.-Iran talks in Doha aimed at easing tensions in the Strait of Hormuz, as tanker traffic continued to recover and concerns grew over a potential supply glut amid rebounding Iranian and Russian exports. West Texas Intermediate traded at $69.50 a barrel. The CBOE Volatility Index fell 6.8 percent to 16.5.
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