(LEAD) Seoul shares fall for 2nd day on foreign selling amid renewed Hormuz tensions

Seoul shares experienced a decline for the second consecutive day on Friday, Aug. 7, as a result of foreign selling triggered by mounting tensions in the Middle East. The benchmark Korea Composite Stock Price Index (KOSPI) closed at 6,258.77, marking a 0.6 percent drop from its opening level of 6,258.77, a decline of 37.61 points.

The trading volume was relatively low at 297.18 million shares, translating to a value of 24.3 trillion won (approximately US$17.1 billion). In the previous trading session, the index had plummeted by 4.58 percent, primarily due to losses incurred by technology stocks. Overseas markets also saw a downward trend, with the Dow Jones Industrial Average falling by 0.85 percent and the tech-focused Nasdaq Composite slipping by 0.06 percent, amidst uncertainty surrounding a potential agreement between the United States and Iran to reopen the Strait of Hormuz.

Iran has threatened to impede U.S. and Israeli vessels from accessing the vital waterway, demanding compensation from hostile nations before permitting their passage. Foreign investors collectively sold stocks worth 858.07 billion won, while domestic investors, comprising both institutions and retail traders, purchased stocks worth 578.99 billion won and 266.98 billion won, respectively.

Analysts believe that the uncertainty over the Strait of Hormuz will likely keep oil prices high, contributing to volatility in the market, which is already unsettled by concerns over the artificial intelligence (AI) trade. Notable decliners included chip manufacturer SK hynix, which fell by 4.88 percent to 1,422,000 won, Hyundai Motor declined by 1.12 percent to 395,500 won, and Lotte Shopping plummeted by 12.93 percent to 99,700 won.

Conversely, Samsung Electronics managed a modest gain of 0.22 percent, rising to 231,000 won, and defense company Hanwha Aerospace experienced a rise of 4.08 percent, reaching 1,097,000 won. As of 3:30 p.m., the Korean won was traded at 1,417.70 won against the U.S. dollar, reflecting a 6.4 won increase from the previous day's closing rate.