South Korea shares fall amid chip selloff

South Korean stocks mirrored the decline on Wall Street on Tuesday as global investors offloaded semiconductor shares prior to Nvidia's earnings release, raising concerns over the profitability of the artificial intelligence sector. The country's won appreciated slightly, while the benchmark bond yield dipped. The KOSPI index slipped 131.07 points, or 1.96%, to 6,565.89 at 01:45 GMT.

Nvidia, a leading AI chip manufacturer, is set to announce its quarterly earnings on Wednesday. Among major index constituents, Samsung Electronics experienced a 1.95% decline, while SK Hynix dropped 4.55%. Battery producer LG Energy Solution decreased 3.04%. Hyundai Motor and Kia Corp, two auto giants, saw gains of 0.12% and 0.95%, respectively.

POSCO Holdings, a steel company, and Samsung BioLogics, a pharmaceutical firm, both lost 0.31% and 0.89%, respectively. The labor union representing SK Hynix workers had recently turned down a proposed wage deal, as reported by an informed source. Hyundai Motor's South Korean workforce inked a tentative agreement with management, ending a decade-long strike and preventing further production disruptions following several partial shutdowns.

Of the 904 listed stocks, 273 rose while 588 declined. Foreign shareholders were net sellers, transacting worth 1,925.5 billion won. The won closed at 1,382.4 per dollar, up 0.06% from the prior close of 1,383.2. The KOSPI has gained 55.81% so far in 2023, and the won has strengthened 4.1% versus the dollar in the same period. In the money and debt markets, September futures for three-year treasury bonds increased 0.02 point to 103.24.

The yield on a common three-year Korean treasury bond remained steady at 3.836%, while the benchmark 10-year yield slipped by 0.7 basis points to 4.331%.