On August 1, South Korean stocks tumbled sharply with the benchmark KOSPI plunging 3.5% and the KOSDAQ retreating by 4% in intraday trading amid heavy foreign and institutional selling.
As of 10:11 a.m., the KOSPI stood at 3,129.01, down 116.43 points, or 3.59%, from the previous session. This marks the steepest single-day percentage drop since April 7, when the index plunged 5.57% following U.S. President Donald Trump’s announcement of reciprocal tariffs.
Foreign investors offloaded a net 292.5 billion won worth of shares, while institutions sold a net 401.3 billion won. Retail investors emerged as the sole buyers, with net purchases totaling 684.9 billion won.
All of the top 10 KOSPI-listed stocks by market capitalization were trading lower. Hanwha Aerospace (012450) fell 8.23%, HD Hyundai Heavy Industries (329180) dropped 6.63%, SK hynix (000660) slid 6.03%, KB Financial Group (105560) lost 4.06%, Samsung Biologics (207940) declined 2.44%, LG Energy Solution (373220) shed 2.35%, Samsung Electronics (005930) fell 1.54%, Hyundai Motor (005380) dipped 1.41%, Samsung Electronics Preferred (005935) was down 1.39%, and Kia (000270) edged down 0.39%.
Han Ji-young, an analyst at Kiwoom Securities, attributed the sharp intraday decline to several domestic factors, including negative sentiment surrounding the Korea-U.S. reciprocal tariff agreement, disappointment over proposed tax reforms, and technical corrections after recent rallies.
“In particular, the tax reform plan includes tighter capital gains tax criteria, which is weighing on large-cap KOSPI stocks heavily owned by retail investors, as well as the KOSDAQ, where retail participation is generally high,” Han said.
He added, “In the short term, volatility stemming from tax-related uncertainty may be unavoidable.”
According to the proposed tax reform, the government plans to lower the threshold for capital gains tax liability on major shareholders from 5 billion won to 1 billion won, while also raising the securities transaction tax rate.
The reform also introduces a new system of separate taxation on dividend income. However, concerns have grown as the top tax rate is set at 35%, higher than the previously expected 25%.
At the same time, the KOSDAQ index was trading at 773.18, down 32.06 points, or 3.98%.
In the KOSDAQ market, institutions and foreign investors net sold 47.6 billion won and 54.6 billion won, respectively, while individuals bought a net 103.8 billion won.
All of the top 10 KOSDAQ-listed stocks by market capitalization were in decline. Alteogen (196170) fell 6.06%, LigaChem Biosciences (141080) dropped 5.28%, Samchundang Pharm (000250) declined 5.28%, Hugel (145020) lost 5.19%, Peptron (087010) was down 5.11%, Rainbow Robotics (277810) dropped 5.05%, HLB (028300) fell 3.23%, Ecopro BM (247540) declined 2.61%, Ecopro (086520) dropped 2.33%, and PharmaResearch (214450) shed 2.33%.
On August 1, South Korean stocks tumbled sharply with the benchmark KOSPI plunging 3.5% and the KOSDAQ retreating by 4% in intraday trading amid heavy foreign and institutional selling.
As of 10:11 a.m., the KOSPI stood at 3,129.01, down 116.43 points, or 3.59%, from the previous session. This marks the steepest single-day percentage drop since April 7, when the index plunged 5.57% following U.S. President Donald Trump’s announcement of reciprocal tariffs.
Foreign investors offloaded a net 292.5 billion won worth of shares, while institutions sold a net 401.3 billion won. Retail investors emerged as the sole buyers, with net purchases totaling 684.9 billion won.
All of the top 10 KOSPI-listed stocks by market capitalization were trading lower. Hanwha Aerospace (012450) fell 8.23%, HD Hyundai Heavy Industries (329180) dropped 6.63%, SK hynix (000660) slid 6.03%, KB Financial Group (105560) lost 4.06%, Samsung Biologics (207940) declined 2.44%, LG Energy Solution (373220) shed 2.35%, Samsung Electronics (005930) fell 1.54%, Hyundai Motor (005380) dipped 1.41%, Samsung Electronics Preferred (005935) was down 1.39%, and Kia (000270) edged down 0.39%.
Han Ji-young, an analyst at Kiwoom Securities, attributed the sharp intraday decline to several domestic factors, including negative sentiment surrounding the Korea-U.S. reciprocal tariff agreement, disappointment over proposed tax reforms, and technical corrections after recent rallies.
“In particular, the tax reform plan includes tighter capital gains tax criteria, which is weighing on large-cap KOSPI stocks heavily owned by retail investors, as well as the KOSDAQ, where retail participation is generally high,” Han said.
He added, “In the short term, volatility stemming from tax-related uncertainty may be unavoidable.”
According to the proposed tax reform, the government plans to lower the threshold for capital gains tax liability on major shareholders from 5 billion won to 1 billion won, while also raising the securities transaction tax rate.
The reform also introduces a new system of separate taxation on dividend income. However, concerns have grown as the top tax rate is set at 35%, higher than the previously expected 25%.
At the same time, the KOSDAQ index was trading at 773.18, down 32.06 points, or 3.98%.
In the KOSDAQ market, institutions and foreign investors net sold 47.6 billion won and 54.6 billion won, respectively, while individuals bought a net 103.8 billion won.
All of the top 10 KOSDAQ-listed stocks by market capitalization were in decline. Alteogen (196170) fell 6.06%, LigaChem Biosciences (141080) dropped 5.28%, Samchundang Pharm (000250) declined 5.28%, Hugel (145020) lost 5.19%, Peptron (087010) was down 5.11%, Rainbow Robotics (277810) dropped 5.05%, HLB (028300) fell 3.23%, Ecopro BM (247540) declined 2.61%, Ecopro (086520) dropped 2.33%, and PharmaResearch (214450) shed 2.33%.