Kospi breaks below 7,000 after Chuseok holiday as Samsung Electronics, SK hynix slide over 2%

The Kospi broke below the 7,000-point mark Monday as trading resumed after the Chuseok holiday, dragged down by joint selling from foreign and institutional investors. Samsung Electronics and SK hynix each fell more than 2%, weighing on the index, while the Kosdaq bucked the trend and climbed above 860 on foreign net buying.

According to Korea Exchange, the Kospi was trading at 6,998.62 as of 9:49 a.m. Monday, down 82.30 points, or 1.16%, from the previous session. The index opened at 7,057.86, a drop of 23.06 points (0.33%), before sliding to an intraday low of 6,989.34, breaching the 7,000 threshold.

On the main board, foreign investors and institutions were net sellers of 382.5 billion won ($283 million) and 21.7 billion won, respectively. Retail investors absorbed the selling pressure with net purchases of 171 billion won.

Top-cap stocks Samsung Electronics and SK hynix were both in the red. Samsung Electronics was trading at 279,500 won, down 6,000 won (2.10%) from the previous session, while SK hynix fell 50,000 won (2.69%) to 1.81 million won.

Samsung Electronics preferred shares (-3.98%), SK Square (-5.21%) and KB Financial Group (-0.06%) were also lower. Samsung Electro-Mechanics (1.59%), LG Energy Solution (4.55%), Hyundai Motor (0.99%) and Samsung Biologics (1.46%) were among the gainers.

US markets fell during the holiday period on a surge in Treasury yields before recovering on the final trading day. From Wednesday through Friday — the three sessions the Korean market was closed — the Dow Jones Industrial Average lost 0.1%, the S&P 500 fell 0.3% and NASDAQ dropped 0.6%, as the 10-year US Treasury yield spiked to 5.2% intraday on Thursday. On Friday, however, falling crude oil prices and strength in technology stocks lifted the Dow 0.93%, the S&P 500 0.51% and NASDAQ 0.48%. The Philadelphia Semiconductor Index also rose 1.41%.

The Kosdaq, by contrast, was advancing. At the same time, the index was up 15.91 points, or 1.88%, at 860.39, after opening just 1.00 point (0.12%) higher at 845.48 before extending its gains.

On the Kosdaq, foreign investors and institutions were net buyers of 85.5 billion won and 1.5 billion won, respectively, while retail investors were net sellers of 83.6 billion won.

Among top Kosdaq-listed stocks by market capitalization, Alteogen (2.80%), Ecopro (2.87%), Ecopro BM (3.81%), Jusung Engineering (0.24%) and Simtech (0.94%) were rising. Rainbow Robotics (-0.58%), Wonik IPS (-3.89%) and EO Technics (-0.93%) were declining.

Han Ji-young, a researcher at Kiwoom Securities, forecast that the Kospi would see a battle around the 7,000 level this week, influenced by US Treasury yields, employment data, domestic exports and Micron's earnings. "Volatility that may emerge as markets digest a cluster of major domestic and overseas events — Micron earnings, export data and employment figures — all concentrated in the latter half of the week should be approached as an opportunity to increase equity exposure," Han said.