South Korean stocks closed lower on Tuesday, ending a five-session rally as investors locked in profits on large-cap shares amid diminishing optimism for a resolution to the conflict between Iran and the United States.
The benchmark KOSPI opened 2% higher but reversed course to close down 108.11 points, or 1.55%, at 6,869.83. Trading volume reached 399.04 million shares, with turnover at 29.64 trillion won (approximately $20.9 billion). Declining stocks outpaced advancers by a margin of 679 to 195.
Institutional investors were net sellers, offloading 784.9 billion won worth of shares, while foreign investors and retail traders purchased 91.4 billion won and 731.29 billion won, respectively.
Overnight on Wall Street, the Dow Jones Industrial Average fell 0.51%, and the tech-heavy Nasdaq Composite slipped 0.32%.
Persistently elevated oil prices have stoked inflation concerns, while U.S. President Donald Trump indicated no intention to extend the soon-to-expire truce agreement with Iran, further dampening expectations for a peace deal. The conflict with Iran has now persisted for nearly six months with no end in sight. A memorandum of understanding signed in June, which was designed to provide Washington and Tehran a 60-day window to reach a more durable peace accord, expired in principle on Monday. However, disagreements over the reopening of the strait quickly reignited hostilities, leading to multiple military clashes. Both sides have since stated that the agreement is effectively void.
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