Seoul Stocks Turn Flat as Investors Weigh AI Warnings and Fed Decision
The KOSPI erased an earlier decline by late Tuesday morning as gains in major chipmakers offset weakness in defense shares, while investors awaited the U.S. Federal Reserve’s policy decision and assessed calls for a slower pace of AI development.
South Korean stocks recovered from an early decline to trade flat late Tuesday morning as investors weighed caution from artificial intelligence industry leaders and waited for the U.S. Federal Reserve’s upcoming interest-rate decision.
The benchmark Korea Composite Stock Price Index stood unchanged at 6,684.32 as of 11:20 a.m. The reading marked a reversal from the opening session, when the index had fallen 0.52 percent to 6,649.68 at 9:16 a.m. amid weakness in technology shares and higher U.S. bond yields.
Large-cap stocks showed no uniform direction. Semiconductor bellwether Samsung Electronics gained 0.5 percent, while SK hynix advanced 0.82 percent. The two chipmakers helped steady the broader market after investors initially reacted to calls from AI executives for the industry to proceed more cautiously in developing the technology because of potential risks.
Elsewhere, battery maker LG Energy Solution rose 3.41 percent and Hyundai Motor added 0.27 percent. Hanwha Aerospace moved sharply in the opposite direction, falling 7.21 percent and limiting the index’s recovery. The mixed performance across major companies reflected a market balancing strength in semiconductors and batteries against heavy selling in a leading defense stock.
Investors were also looking overseas for direction. U.S. equities had closed lower overnight, with technology stocks under pressure. The S&P 500 declined 0.48 percent and the technology-heavy Nasdaq lost 0.56 percent. The yield on the benchmark 10-year U.S. Treasury note reached 5 percent, adding to concerns about financing conditions and the outlook for interest rates.
Attention remained fixed on the Federal Reserve’s policy meeting this week. Its decision and accompanying signals could influence global risk appetite, bond yields and foreign-exchange markets, all of which are closely watched by investors in export-oriented Korean shares.
The Korean won was quoted at 1,354 per U.S. dollar at 11:20 a.m., down 7.8 won from the close of the previous stock-trading session. Earlier, at 9:16 a.m., it had traded at 1,347.5 won per dollar, down 1.3 won from the prior stock-market close. The intraday figures showed the currency weakening further as the morning progressed. The won’s movement accompanied the stabilization in equities, but the flat index and split performance among heavyweight shares indicated that investors remained reluctant to make broad bets before the Fed’s announcement.