Kospi slips below 6,000 as Samsung Electronics tumbles 5% after earnings

The Kospi fell back below the 6,000 mark Thursday after Samsung Electronics released its earnings, reversing course just one day after surging more than 6 percent on the back of SK hynix's record results and sweeping shareholder return plan.

As of 1:49 p.m., the Kospi was down 82.51 points, or 1.37 percent, at 5,929.93.

The index had opened up 4.78 points, or 0.08 percent, at 6,017.22 before turning lower following Samsung Electronics' earnings announcement.

On the main Kospi market, foreign and individual investors were net buyers of 189.3 billion won ($142 million) and 209.9 billion won, respectively. Foreign investors were net buyers for a third consecutive session. Institutions were net sellers of 644.3 billion won.

All three major Wall Street indexes closed higher overnight. The Dow Jones Industrial Average rose 0.19 percent. The S&P 500 and NASDAQ gained 0.28 percent and 0.27 percent, respectively.

The Federal Reserve held its benchmark interest rate steady at 3.75 to 4.00 percent as expected, and remarks by Fed Chair Kevin Warsh were interpreted as relatively dovish. Gains were capped, however, as international oil prices climbed amid renewed tensions in the Middle East.

December Brent crude rose 1.26 percent to $115.32 per barrel, while West Texas Intermediate gained 2.88 percent to $102.78 per barrel.

On Wednesday, the Kospi had surged more than 6 percent after SK hynix reported record-high earnings and announced an expanded shareholder return program.

Thursday's gains evaporated after Samsung Electronics released detailed third-quarter results and its shareholder return plan in the morning, triggering profit-taking. "The market pulled back to the 5,800 range on Samsung Electronics' earnings release while digesting the FOMC decision and big-tech results," said Kang Jin-hyeok, an analyst at Shinhan Securities.

Samsung Electronics disclosed that its third-quarter consolidated operating profit reached 107.44 trillion won, up 783.1 percent from a year earlier. Sales rose 126.9 percent to 195.25 trillion won.

Market watchers attributed the selling pressure to the company's decision to defer specifics of its additional shareholder return plan to a board meeting in January next year. "Only the annual shareholder return scale and basic direction were outlined — the size of additional buybacks and a concrete execution timeline were not provided," said Lee Young-gon, head of research at Toss Securities. "Disappointment selling appears to be emerging as the short-term supply-demand improvement measures the market had anticipated did not materialize."

Samsung Electronics plans to announce at its January board meeting the specific method and scale of an additional 55 trillion to 75 trillion won in shareholder returns, on top of the 35 trillion won already executed or committed out of this year's total planned return. The board also approved a total cash dividend of 30 trillion won, or 4,601 won per share, including the regular third-quarter dividend.

Samsung Electronics was trading down 4.96 percent at 230,000 won. SK hynix, which unveiled its large-scale shareholder return plan on Wednesday, continued to advance, up more than 3 percent.

Among large-cap stocks, Hyundai Motor rose 4.39 percent, SK Square gained 4.02 percent and KB Financial Group added 0.71 percent. LG Energy Solution fell 7.57 percent, Samsung Electro-Mechanics dropped 1.23 percent and Samsung Life Insurance declined 0.90 percent.

At the same time, the Kosdaq was down 17.71 points, or 2.30 percent, at 753.57, extending losses after opening 3.50 points, or 0.45 percent, lower at 767.78.

On the Kosdaq market, foreign and institutional investors were net sellers of 114.3 billion won and 64.4 billion won, respectively, while individual investors were net buyers of 192.1 billion won.

Most large-cap Kosdaq stocks were in the red, with Jusung Engineering down 3.34 percent, Ecopro BM falling 4.92 percent, Sam Chun Dang Pharm declining 1.42 percent and Leeno Industrial losing 2.99 percent.