[THE INVESTOR] South Korean share prices declined on July 8 after the country and its main ally, the US, agreed to deploy a high-tech antiballistic-missile interception system in Korea.

The benchmark KOSPI index closed 0.56 percent lower at 1963.01 points as exporting firms like cosmetic makers became big losers. Investor sentiment was down, analysts said, on concerns over the possibility of diplomatic tension with China and Russia following the THAAD decision. 

Institutions offloaded a net 296.5 billion won worth of local shares, while foreign investors purchased a net 30.06 billion won. Individual investors scooped up a net 222.17 billion won.

“The market appears to have been affected by the fresh geopolitical risk created by the government‘s agreement with the US to deploy the Terminal High Altitude Area Defense system in South Korea, even though there were many other factors affecting the market, such as a continued depreciation of the Chinese yuan,” said Kim Sung-hwan, an analyst at Bookook Securities analysts.

Stocks of retail companies relying on exports to China plunged.

Top automaker Hyundai Motor lost 0.38 percent to 130,500 won, while a leading cosmetics maker, LG Household & Health Care, plunged 4.49 percent to 1,128,000 won.

The secondary KOSDAQ also shed 0.48 percent to close at 692.60 points.

Share prices of defense manufacturers, however, surged.

Speco, which makes military products, closed 11.11 percent higher while Victek, a electronic weapon maker, rose 25.19 percent to close at a two-month high.

By Park Han-na (hnpark@heraldcorp.com)