The Korean stock market declined during the week of July 20–24, with the KOSPI index falling 1.91% to close at 6690.62. The drop was triggered by escalating Middle East conflict uncertainties and profitability concerns among hyperscaler companies. Geopolitical tensions intensified after Iran-aligned Houthi rebels attacked Saudi oil tankers in the Bab-el-Mandeb Strait, raising oil prices and shifting investor sentiment toward renewable energy stocks while semiconductor shares retreated.
KOSPI Records 1.91% Weekly Decline Amid Circuit Breaker Triggers
According to the Korea Exchange on July 25, the KOSPI index fell 129.98 points (1.91%) during the week of July 20–24, closing at 6690.62. Circuit breakers were triggered every day except July 23. Sell-side circuit breakers activated on July 20 and July 24, while buy-side circuit breakers occurred on July 21 and July 22. On July 24, the KOSPI plunged 5.72%, marking a 'Black Friday' for the market. The decline was driven by Middle East war uncertainties and concerns over hyperscaler profitability, particularly as military confrontations between the United States and Iran escalated.
Renewable Energy Stocks Surge on Oil Price Rally
Rising oil prices propelled renewable energy stocks to the top of the market. Among KOSPI stocks with market capitalization above 1 trillion won and weekly trading volume exceeding 100 billion won, SK E&S posted the largest gain at 55.58%. HD Hyundai Energy Solutions followed with a 48.96% increase, SK Oceanplant rose 37.56%, and OCI Holdings climbed 28.67%. SK E&S operates in solar, wind, fuel cell, and ESS (energy storage system) sectors. HD Hyundai Energy Solutions reported second-quarter operating profit of 36.1 billion won, up 139.8% year-over-year, exceeding market expectations. On July 23, OCI Holdings announced expansion plans for polysilicon and wafer production, prompting securities firms to raise target prices. Lee Jin-ho, a researcher at Mirae Asset Securities, stated that OCI Holdings' long-term supply agreements (LTA) for polysilicon and wafer are increasing, with 2028–2029 volumes essentially sold out, and raised the target price from 320,000 won to 460,000 won.
Semiconductor Stocks Fall Following Alphabet Earnings Concerns
Semiconductor stocks declined as profitability concerns emerged after Alphabet's earnings announcement. On July 22 (local time), Alphabet reported second-quarter free cash flow (FCF) of -5.86 billion dollars due to increased capital expenditures from CAPEX expansion. SK Hynix fell 4.51% and Samsung Electronics dropped 2.16%. Among KOSPI stocks with market capitalization above 1 trillion won and weekly trading volume exceeding 100 billion won, semiconductor equipment supplier KC Tech recorded the steepest decline at 25.50%. Daeduck Electronics fell 20.65% and Hanmi Semiconductor declined 17.53%.
Department Store Shares Drop on Consumption Worries
Department store stocks also ranked among the week's worst performers. Hyundai Department Store fell 17.66%, Shinsegae declined 14.43%, and Lotte Shopping dropped 10.58%. Lee Jin-hyeop, a researcher at Hanwha Investment & Securities, stated that recent weakness in department store stocks reflects concerns about domestic consumption, as the market is wary of asset effect contraction due to strong corrections in the stock market this month. He added that Lotte Group Chairman Shin Dong-bin's disclosure on July 22 of plans to sell a 1.15% stake in Lotte Shopping negatively impacted investor sentiment toward department stores in the short term.
Patriotic Stock Movement Reverses Gains
Stocks that had risen due to the 'support domestic companies' movement reversed their gains during the week of July 20–24. Enex fell 53.72%, Monami dropped 52.95%, Hansung Enterprise declined 47.87%, and Vivien fell 42.68%, ranking among the top decliners out of 943 KOSPI-listed stocks.
SK Hynix Earnings and FOMC Meeting Scheduled for Following Week
The final week of July (July 27–31) is expected to be a 'super week' with SK Hynix earnings announcement and the FOMC (Federal Open Market Committee) meeting scheduled. Lim Jung-eun, a researcher at KB Securities, stated that sector investment sentiment will be influenced by heightened interest in CAPEX investment and sustained semiconductor demand.
FAQ
What caused the KOSPI to fall during the week of July 20–24?
The KOSPI fell 1.91% (129.98 points to 6690.62) due to escalating Middle East conflict uncertainties and profitability concerns among hyperscaler companies. Geopolitical tensions intensified after Iran-aligned Houthi rebels attacked Saudi oil tankers in the Bab-el-Mandeb Strait.
Which stocks gained the most during the week of July 20–24?
Renewable energy stocks posted the largest gains. SK E&S rose 55.58%, HD Hyundai Energy Solutions increased 48.96%, SK Oceanplant climbed 37.56%, and OCI Holdings gained 28.67%, driven by rising oil prices.
Why did semiconductor stocks decline during the week?
Semiconductor stocks fell after Alphabet reported second-quarter free cash flow of -5.86 billion dollars on July 22 (local time) due to increased capital expenditures from CAPEX expansion. SK Hynix declined 4.51% and Samsung Electronics dropped 2.16%.
