Shares in Seoul see a significant drop of almost 2%, driven by profit-taking activities.
In a surprising turn of events, the Kospi, South Korea's primary stock market index, fell by 1.99% (61.99 points) on July 4, 2025, marking its largest one-day drop since April 7, 2025. The index closed at 3,054.28 points, ending a five-week winning streak and giving up the 3,100-level it had briefly surpassed earlier.
The decline was primarily influenced by profit-taking pressure and rising concerns over the imminent tariff deadline with the United States. After the Kospi surged to a near four-year high on July 3, driven by the National Assembly’s passage of a shareholder-friendly revision of the Commercial Act and optimism around tariff talks, investors chose to lock in gains, leading to selling pressure.
Moreover, market caution grew ahead of the expiration of a reciprocal tariff exemption between the U.S. and Korea, set to expire on July 9, 2025. The looming risk of a 25% tariff being re-imposed on Korean goods created apprehension among investors, dampening sentiment. U.S. President Donald Trump was expected to send a trade letter specifying tariff rates on July 7, adding to the uncertainty.
On July 4, institutional investors were net sellers (444 billion won), while individuals and foreigners were net buyers, but this was not enough to offset the overall decline.
The decrease in the Kospi may indicate a negative trend in the South Korean stock market. However, the Korea Exchange chief aims to clean up the Kospi market through ongoing reforms, with the expectation of a new high for the Kospi in the future. The Kospi's 4-year high was due to tech gains and a law revision, suggesting that the market still holds potential for growth.
The Kospi opened lower on July 5, continuing the downward trend from the previous trading session. The Kospi's closing and opening figures are significant financial indicators, providing insights into the health and direction of the South Korean stock market. The decrease occurred in the trading room of Hana Bank in central Seoul and was reported by YONHAP.
Despite the recent drop, it is important to note that as of July 5, the Kospi has reached a 4-year high on certain occasions. The Kospi's performance underscores the dynamic nature of the South Korean stock market, which is influenced by a variety of factors including domestic policies, international trade negotiations, and investor sentiment.
- The decline in the Kospi on July 4, 2025, was influenced by profit-taking pressure and rising concerns over the imminent tariff deadline with the United States, reflecting a potential negative trend in the South Korean stock market.
- Market cautions grew ahead of the expiration of a reciprocal tariff exemption between the U.S. and Korea, with the looming risk of a 25% tariff being re-imposed on Korean goods creating apprehension among investors, dampening sentiment in the business industry.
- In the opinion of the Korea Exchange chief, the Kospi market can be cleaned up through ongoing reforms, with the expectation of a new high for the Kospi in the future, demonstrating confidence in the economy's continued growth.
- Analyses of the Kospi's performance indicate that it is a dynamic market, influenced by a variety of factors such as domestic policies, international trade negotiations, and investor sentiment in the finance sector.
