KOSPI pauses as Kosdaq surges on sector rotation

KOSPI fell nearly 2 percent on Thursday amid renewed tensions in the Middle East, while the previously underperforming Kosdaq rallied more than 2 percent.

Investors appeared to rotate out of heavyweight KOSPI stocks and into smaller-cap names, with Kosdaq-listed machinery, equipment and manufacturing companies attracting much of the inflow, according to market analysts.

The benchmark KOSPI opened at 8,623.82, down 177.67 points, or 2.02 percent, from the previous close, and ended the session at 8,639.41, down 162.08 points, or 1.84 percent, snapping a four-session winning streak that began on May 28.

In the previous trading session on Tuesday, the index briefly surpassed the 8,900 mark for the first time on an intraday basis before closing in the 8,800 range.

The decline was attributed to overnight losses on Wall Street, where all three major U.S. indexes fell as hopes for a breakthrough in ceasefire talks between Washington and Tehran faded.

Growing geopolitical uncertainty pushed up both crude oil prices and government bond yields, prompting investors to reduce risk exposure.

Reflecting