Cautious Sentiment Deepens as KOSPI and KOSDAQ Close Lower

Expectations for U.S. Rate Cuts Recede
Caution Rises Over Tariff Negotiations
"Tariff Talks to Be Key Market Variable Next Week"

On July 4, both the KOSPI and KOSDAQ markets closed lower, as expectations for interest rate cuts receded following robust U.S. employment data and heightened caution regarding tariff negotiations.

The KOSPI index ended the day at 3,054.28, down 61.99 points (1.99%) from the previous session. The index initially opened at 3,122.28, up 6.01 points (0.19%), but soon reversed course and extended its losses. Institutions were net sellers of 444.1 billion won, while foreigners bought 162.1 billion won and individuals purchased 257.3 billion won.

Among large-cap stocks, only Celltrion (up 3.31%), HMM (up 1.67%), and POSCO Holdings (up 1.44%) gained. In contrast, HD Hyundai Heavy Industries (down 5.58%), Hanwha Aerospace (down 4.65%), KB Financial Group (down 4.11%), Doosan Enerbility (down 3.07%), SK Hynix (down 2.87%), Samsung Life Insurance (down 2.59%), LG Energy Solution (down 2.51%), Hyundai Motor (down 1.86%), Kakao (down 1.85%), and NAVER (down 1.58%) all declined.

On the 4th, the KOSPI, which started rising, gave up the 3100 level amid selling pressure from foreigners and institutions, continuing the battle. In the dealing room of Hana Bank in Jung-gu, Seoul, the index status board displays information on KOSPI, KOSDAQ, and exchange rates. Photo by Yoon Dongju

By industry, electric and gas (up 3.37%) and real estate (up 0.37%) sectors rose. However, most sectors fell, including securities (down 5.74%), transportation equipment and parts (down 3.64%), machinery and equipment (down 3.06%), finance (down 3.01%), construction (down 2.75%), medical precision instruments (down 1.99%), manufacturing (down 1.97%), entertainment and culture (down 1.97%), general services (down 1.89%), insurance (down 1.83%), electrical and electronics (down 1.78%), chemicals (down 1.75%), and food, beverage, and tobacco (down 1.70%).

The KOSDAQ index closed at 775.80, down 17.53 points (2.21%) from the previous session. The index opened at 792.65, down 0.68 points (0.09%), and recorded a steeper decline than the KOSPI. Foreign investors and institutions were net sellers of 323.7 billion won and 79.3 billion won, respectively. Individuals were net buyers of 398 billion won.

Among the KOSDAQ's large-cap stocks, only Celltrion Pharm (up 1.27%) rose. In contrast, most stocks declined, including ABL Bio (down 11.17%), Peptron (down 5.92%), Silicon Two (down 5.77%), LIG Chem Bio (down 5.75%), Alteogen (down 5.65%), Kolon TissueGene (down 5.35%), Classys (down 4.64%), Hugel (down 3.98%), SM (down 3.83%), Lino Industrial (down 2.91%), Rainbow Robotics (down 2.90%), Ecopro (down 2.60%), Samchundang Pharm (down 2.58%), GemVax (down 1.99%), Ecopro BM (down 1.98%), and PharmaResearch (down 1.40%).

Kim Jiwon, a researcher at KB Securities, stated, "Expectations for interest rate cuts have diminished, and as the final results of the tariff negotiations approach, investors have become more cautious. While the U.S. stock market rebounded on the back of strong employment data, this in turn reduced expectations for rate cuts, leading to generally weaker markets across Asia."

Kim added, "With the Trump administration's tax cut plan passing the House, domestic sectors such as automobiles, secondary batteries, and semiconductors, which are likely to be affected by subsidy cuts, saw heavy selling. The passage of the Commercial Act amendment has removed a key driver, and only uncertainty regarding the tariff negotiations is being reflected, resulting in a market-wide pause." He further noted, "The outcome of the tariff negotiations, which will continue through the weekend until July 8, is expected to be a major variable influencing the market direction next week."