Kospi tumbles below 7,000 as foreigners dump W3tr in Samsung Electronics, SK hynix

The Kospi tumbled more than 2 percent on Monday, falling below the 7,000-point threshold when it resumed trading after the Chuseok holiday, as foreign investors dumped a combined 3 trillion won ($2.22 billion) worth of Samsung Electronics and SK hynix shares. The selloff was driven by a surge in US long-term interest rates during the holiday break, concerns over delays in AI data center investment, and speculation that Solidigm — SK hynix's US-based subsidiary — could pursue an initial public offering.

The Kospi closed at 6,889.74, down 191.18 points, or 2.70 percent, from the previous session — its first close below 7,000 in four trading days. The index opened at 7,057.86, down 23.06 points, or 0.33 percent, briefly trimmed its losses to a session high of 7,065.90 early in the day, then extended its decline through the afternoon. The intraday low of 6,889.68 was just 0.06 points below the closing level.

Foreign selling was concentrated in large-cap semiconductor stocks. On the main Kospi market, foreigners were net sellers of 3.24 trillion won while institutions net sold 1.02 trillion won; retail investors were net buyers of 2.61 trillion won. Foreigners net sold 1.73 trillion won worth of SK hynix and 1.38 trillion won worth of Samsung Electronics. Samsung Electronics preferred shares also saw net foreign selling of 421.3 billion won.

All five of the top market-capitalization stocks declined. Samsung Electronics fell 5.43 percent and SK hynix dropped 5.05 percent, while Samsung Electronics preferred shares shed 5.91 percent and SK Square tumbled 7.56 percent. Samsung Electro-Mechanics slipped 0.53 percent. LG Energy Solution — ranked sixth by market cap — gained 3.56 percent, and Hyundai Motor (up 0.28 percent), Samsung Biologics (up 2.49 percent), KB Financial Group (up 0.58 percent) and Samsung Life Insurance (up 0.51 percent) all closed higher.

The market was catching up to a sharp rise in US long-term yields that occurred while domestic trading was suspended for the holiday. September S&P Global manufacturing and services purchasing managers' index readings came in above expectations, pushing the US 10-year yield above 5.2 percent and the 30-year yield above 5.5 percent. The 30-year yield briefly touched 5.519 percent, its highest level since June 2004.

Oil-price jitters from the Middle East added to the pressure. International crude prices had approached $100 per barrel as tensions between the United States and Iran escalated, but both WTI and Brent crude fell around 2 percent on Monday as expectations for negotiations between the two countries emerged.

Concerns about AI data center investment also weighed on semiconductor shares. Analysts said investor sentiment toward parts of the AI supply chain — including memory chips — had soured after Oracle invoked force majeure with AI data center developers, citing power supply disruptions.

SK hynix faced an additional headwind. Reports that its subsidiary Solidigm could move toward a US IPO as early as this year raised concerns that existing shareholders' economic stakes could be diluted.

"US long-term yields surged, with the 10-year and 30-year rates exceeding 5.2 percent and 5.5 percent respectively as September S&P Global PMI figures beat expectations, and large-cap semiconductor stocks — which carry heavy valuation burdens in a high-rate environment — saw concentrated selling," said Kim Ki-baek, an analyst at Shinhan Securities. "Concerns over data center development delays stemming from Oracle's power supply disruption further dampened sentiment across parts of the AI supply chain, including memory chips, making the weakness in Samsung Electronics and SK hynix particularly pronounced," he added.

The Kosdaq bucked the trend and closed higher. The index opened up 1.00 point, or 0.12 percent, at 845.48 and ended the session up 2.10 points, or 0.25 percent, at 846.58. Foreigners net bought 45.7 billion won and retail investors net bought 21.5 billion won, while institutions were net sellers of 74.5 billion won.