SEOUL, August 28 (AJP) — South Korean shares retreated Friday as investors digested the Bank of Korea's back-to-back rate hikes, with losses in major chip and biotech stocks overwhelming the positive spillover from Nvidia's overnight surge.
The KOSPI traded at 6,818.87, down 1.29 percent, as of 10:30 a.m. amid broad selling and thin turnover. Losers outnumbered gainers 575 to 294.
Foreign investors led the outflows, selling a net 233.5 billion won ($169.1 million). Institutions unloaded 10.4 billion won, while retail investors also turned net sellers with 34.7 billion won in net sales.
The retreat followed Thursday's decision by the Bank of Korea (BOK) to raise its benchmark rate by 25 basis points to 3.00 percent, delivering its first back-to-back hikes since January 2023.
Higher U.S. Treasury yields and lingering geopolitical uncertainty added to the pressure. U.S.-Iran tensions remained elevated, with Washington keeping its options open and Tehran warning of retaliation.
The U.S. 10-year Treasury yield rose 3.0 basis points to 4.6762 percent, while the 30-year yield climbed 2.6 basis points to 5.1931 percent.
The weakness in Seoul contrasted with a strong overnight rally on Wall Street, where Nvidia's earnings and sales outlook reinforced expectations for continued artificial intelligence investment.
The Dow Jones Industrial Average rose 0.20 percent, the S&P 500 gained 0.72 percent and the Nasdaq Composite jumped 1.57 percent. The Philadelphia Semiconductor Index climbed 2.33 percent, while Nvidia surged 8.74 percent.
The enthusiasm failed to carry over into Korean chip shares.
About 40 minutes after the opening bell, SK hynix was down 0.75 percent at 1,717,000 won, while Samsung Electronics fell 0.85 percent to 263,750 won.
Samsung Electronics preferred shares lost 2.42 percent to 189,600 won, while SK Square declined 1.83 percent to 1,048,500 won.
The declines erased part of Thursday's gains, when Korean chipmakers rallied after Nvidia's strong results and outlook strengthened expectations for sustained demand for advanced memory used in AI infrastructure.
Elsewhere in technology, Samsung Electro-Mechanics bucked the weakness, rising 2.24 percent to 1,416,000 won. LG Energy Solution fell 1.48 percent to 365,000 won, while Samsung SDI gained 0.53 percent to 572,000 won.
Biotechnology shares were among the sharpest decliners.
Samsung Biologics plunged 6.15 percent to 1,496,000 won after announcing plans to raise about 3 trillion won through a new share issue.
The company said most of the proceeds will be used to acquire PolyPeptide Group, a Swiss drug-ingredient manufacturer, with the remainder going toward expansion of its second biocampus in Songdo.
The new shares would increase Samsung Biologics' share count by about 4.9 percent, diluting existing shareholders and weighing on the stock.
Automakers proved relatively resilient. Hyundai Motor rose 0.38 percent to 399,500 won and Kia gained 0.16 percent to 126,300 won, while Hyundai Mobis slipped 0.22 percent to 450,000 won.
Among industrial and defense shares, Hanwha Aerospace fell 2.43 percent to 1,122,000 won, while Doosan Enerbility rose 0.70 percent to 86,500 won. HD Hyundai Heavy Industries was unchanged at 470,000 won.
Financial shares also weakened, with KB Financial down 0.65 percent at 167,000 won and Shinhan Financial falling 0.64 percent to 108,100 won. Samsung Life declined 1.47 percent to 302,500 won.
Samsung C&T fell 1.60 percent to 369,500 won, while SK dropped 2.70 percent to 541,000 won.
One notable exception was SK Telecom.
The stock climbed 2.22 percent to 101,300 won at the open after unveiling a plan to bring in 3.08 trillion won of outside investment to expand its AI data center business.
The investment will help finance the expansion while SK Telecom retains a 51 percent stake in the new unit. The stock later pared most of its gains and was up about 0.4 percent.
The junior KOSDAQ followed a similar pattern, surrendering an early gain and turning lower. About an hour into trading, the index stood at 833.78, down 0.46 percent, after falling as low as 829.79.
Retail investors bought a net 126.5 billion won, while foreign investors sold 103.1 billion won and institutions unloaded 23.5 billion won.
Biotech and battery-material stocks were mostly lower. Alteogen slipped 0.16 percent to 311,000 won.
Battery-material maker EcoPro BM dropped 2.29 percent to 115,300 won, while parent EcoPro fell 3.04 percent to 89,200 won.
Robot maker Rainbow Robotics lost 2.76 percent to 458,000 won.
Among semiconductor-equipment shares, Jusung Engineering rose 1.62 percent to 182,000 won. Wonik IPS gained 0.44 percent to 113,200 won and LEENO Industrial climbed 0.60 percent to 67,100 won, while EO Technics fell 1.11 percent to 402,000 won.
The Korean won strengthened slightly to 1,379 per dollar as of 10:03 a.m., compared with 1,380.9 in the previous session.
Japan's Nikkei 225 added 0.6 percent to 66,524.88.
AJP Takeaways
• The KOSPI fell 1.29 percent to 6,818.87 as of 10:30 a.m., as investors digested the BOK's back-to-back rate hikes while higher U.S. Treasury yields and geopolitical uncertainty weighed on sentiment.
• Samsung Electronics and SK hynix gave back part of Thursday's Nvidia-driven gains despite an 8.74 percent surge in Nvidia and a strong overnight rally in U.S. chip stocks.
• Samsung Biologics plunged more than 6 percent after announcing a roughly 3 trillion won share issue, while SK Telecom briefly rallied on a 3.08 trillion won outside investment plan for its AI data center business.
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