KOSPI falls after four consecutive days of gains, led by chip stocks
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Glonghui, February 2|Dragged down by the weakness in chip stocks and a sharp plunge in precious metal prices, the Korea Composite Stock Price Index (KOSPI) saw a maximum drop of 2.7%, highlighting the fragility of sentiment in global financial markets. Shares of Samsung and SK Hynix at one point plummeted by 3.3% and 5.3% respectively, before narrowing their losses. The decline in the KOSPI narrowed to around 1%. Kyoung-Min Lee, an analyst at Seoul Daishin Securities, wrote in a research report: "Although the KOSPI has opened up some upside potential towards 5,800 points, the market currently needs to cool down from short-term overheating. To continue rising, a round of adjustment must come first." As the market rally shows initial signs of fatigue, uncertainties related to Trump continue to intensify; the nomination of Kevin Warsh as the next Federal Reserve Chair has further heightened concerns about liquidity. Both overseas funds and domestic institutions are net sellers of KOSPI component stocks, while retail investors are buying against the trend. The decline in the Korea Growth Enterprise Market Index (KOSDAQ) has narrowed significantly, almost erasing the previous drop of up to 3%.
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