Global Market: South Korean shares fall over 1% as AI trade concerns weigh; won strengthens

AI jitters and upcoming Big Tech results put South Korean stocks under pressure.

The benchmark KOSPI fell 83.14 points, or 1.50%, to 5,467.16 as of 03:30 GMT. Despite Monday's decline, the index has gained about 30% so far this year.

Chipmakers led losses among major stocks, with Samsung Electronics falling 1.39% and SK Hynix declining 0.47%. Battery maker LG Energy Solution slipped 1.70%, while Hyundai Motor and Kia Corp dropped 2.71% and 1.78%, respectively.

Investor sentiment remained cautious ahead of results from major US technology companies, as markets assess the outlook for AI-related investments and spending. About a third of S&P 500 companies are scheduled to report quarterly results this week, including Alphabet, Microsoft and Amazon. Investors are expected to watch their capital expenditure forecasts closely.

According to Reuters, SK Hynix said it would announce shareholder return measures on Wednesday alongside its quarterly results. The announcement follows a report that the South Korean chipmaker is considering a special dividend of around 16 trillion won ($12 billion).

Elsewhere, steelmaker POSCO Holdings declined 0.91%, while drugmaker Samsung BioLogics fell 0.34%.

Market breadth remained weak, with 792 stocks declining against 98 advancing among the 914 issues traded. Foreign investors were net sellers of South Korean shares worth 517.9 billion won.

In currency markets, the won strengthened 0.32% to 1,322.0 per dollar on the onshore settlement platform, compared with its previous close of 1,326.2. The currency has appreciated about 9% against the dollar so far this year.

South Korean government bonds also gained, with December futures on three-year treasury bonds rising 0.09 point to 103.24.

The yield on the most liquid three-year Korean treasury bond fell 2.4 basis points to 3.792%, while the benchmark 10-year yield declined 1.9 basis points to 4.080%.