Kospi dips over 2% on tech losses amid Iran deal uncertainty

Shares dropped by more than 2 percent Wednesday as investors locked in gains following recent AI-fueled rallies in semiconductor shares, amid uncertainty over fragile U.S.-Iran peace talks.

The Kospi lost 173.07 points, or 2.04 percent, to close at 8,303.41.

Overnight, U.S. stocks closed higher on a continued chip rally, while investors closely watched developments regarding peace talks between Washington and Tehran.

Iran on Tuesday said it would not meet with top U.S. envoys who had flown to the region following recent hostilities near the Strait of Hormuz, even as indirect talks continued through mediators in Qatar.

Chip heavyweights weighed on the broader market despite robust export data released earlier in the day.

Korea's exports reached a record high in June, surpassing the $100 billion mark for the first time on the back of record semiconductor shipments.

Trade volume was heavy at 396.59 million shares worth 67.8 trillion won ($43.6 billion), with winners outnumbering losers 699 to 191.

Foreigners and institutions sold a net 1.7 trillion won and 70.5 billion won, respectively, while individuals bought a net 1.7 trillion won.

"Foreigners extended their net selling after heavy selling in June, continuing to take profits from the recent rally in semiconductor stocks," said Han Ji-young, an analyst at Kiwoom Securities.

Tech heavyweights weighed on the market.

Samsung Electronics fell 5.84 percent to 314,500 won and SK hynix declined 3.4 percent to 1.56 million won.

Power equipment shares gained on expectations of increased infrastructure investment for semiconductor clusters and AI data centers under the government's latest investment plan. LS Electric jumped 10.71 percent to 263,500 won, while HD Hyundai Electric rose 4.12 percent to 1.01 million won.

The Korean won fell 5.5 won from the previous session to trade at 1,554.9 won against the dollar at 3:30 p.m.

Yonhap