(LEAD) Seoul stocks dip over 5 pct on chip sell-off after record surge

SEOUL, Aug. 3 (Yonhap) -- Seoul's stock market experienced a significant downturn on Monday, falling by more than 5 percent as investors cashed in on semiconductor stocks following a record surge the previous day. The Korea Composite Stock Price Index (KOSPI) dropped 338 points, or 5.12 percent, to 6,257.45. The previous day's rally had seen the index surge nearly 18 percent.

However, this week's trading volume was relatively low, with 270.9 million shares changing hands worth 26.1 trillion won. While 454 stocks gained and 417 lost, foreign and institutional investors collectively exited the market, selling a combined net 4.77 trillion won. Retail investors, on the other hand, made a net gain of 4.65 trillion won.

The market's decline was largely attributed to profit-taking by foreign investors, particularly in semiconductor stocks, according to Lee Kyoung-min, an analyst from Daishin Securities. Shares in SK hynix and Samsung Electronics, South Korea's two dominant chip manufacturers, surged by nearly the daily limit on Friday due to the belief that leveraged exchange-traded funds were nearing the end of their unwinding phase.

However, this investor sentiment was tempered by the decline in oil prices, a result of eased tensions between the United States and Iran. The cancellation of a potential military strike by U.S. President Donald Trump had lifted investor confidence. Consequently, oil refiners such as S-Oil and GS, which owns the refiner GS Caltex, suffered losses, with S-Oil falling 4.4 percent to 121,700 won and GS dipping 4.94 percent to 84,600 won.

Among the few winners were Hyundai Motor, which increased by 1.29 percent to 393,000 won, and defense conglomerate Hanwha Aerospace, which rose by 0.22 percent to 919,000 won. As of 3:30 p.m., the Korean won was valued at 1,429.8 won per U.S. dollar, a decline of 5.8 won from the previous day's close.