KOSPI – South Korean Stocks Slide as Tech Shares Face Heavy Selling
KOSPI – South Korea’s benchmark KOSPI index fell steeply on Tuesday, prompting the Korea Exchange to activate a sell-side sidecar as selling intensified across the market. The temporary measure halted program trading for five minutes at about 10:23 a.m., according to the exchange.
Profit-taking follows Samsung earnings outlook
The decline came after investors moved to secure gains following Samsung Electronics’ preliminary estimate for its second-quarter performance. The company projected operating profit of 89.4 trillion won, or about $58.4 billion, for the April-June period, exceeding market expectations.
Yonhap Infomax data showed that Samsung’s estimate was around 6.2 percent above the average analyst forecast. The figure includes provisions related to employee bonuses. Without those costs, quarterly operating profit was estimated at roughly 100 trillion won.
Despite the stronger-than-expected outlook, technology shares faced broad profit-taking as traders reassessed recent gains in semiconductor-related stocks.
Index drops after weak opening
The KOSPI opened 1.6 percent lower at 7,920.48 and later dropped to an intraday low of 7,568.59. The market’s decline stood in contrast to overnight gains in the United States, where the Dow Jones Industrial Average rose 0.29 percent and the Nasdaq gained 1.12 percent.
Foreign and institutional investors were the main sellers during the session. Foreign investors recorded net sales of 1.74 trillion won, while institutions sold a net 97.3 billion won. Individual investors stepped in as buyers, purchasing a net 1.81 trillion won worth of shares.
Semiconductor stocks lead market losses
Samsung Electronics, the country’s largest listed company, declined 7.4 percent as selling spread through the technology sector. SK hynix fell 6.4 percent ahead of its planned $29 billion listing in the United States later this week.
The sharp movement in chip shares weighed heavily on the wider index, given the sector’s significant role in South Korea’s equity market. Investors appeared to take profits after recent gains, even as Samsung’s earnings forecast pointed to continued strength in the semiconductor business.
Automakers and defense shares also decline
Other major companies also traded lower. Hyundai Motor, South Korea’s leading automaker, dropped 5.9 percent during the session. Hanwha Aerospace, a major defense company, lost 4 percent.
Hanwha Ocean recorded one of the day’s largest declines, plunging 23 percent after a South Korean consortium that included the shipbuilder did not secure Canada’s multibillion-dollar submarine procurement contract. The failed bid added pressure to the company’s shares amid the broader market sell-off.
Selective gains seen in consumer and energy stocks
Not all sectors moved lower. Cosmetics producer Amorepacific rose 2.9 percent, while refiner SK Innovation gained 3.9 percent. Their advances offered limited support to the overall market as losses in heavyweight technology companies continued to dominate trading.
The Korean won traded at 1,527.40 against the U.S. dollar as of 11:20 a.m., up 2.6 won from the previous session. Currency movements remained closely watched as foreign investor activity continued to influence sentiment in the local market.