Seoul Stocks Plunge Over 5% as Investors Lock in Chip Profits After Record Rally
Key Takeaways
- •The KOSPI fell 338 points, or 5.12 percent, to 6,257.45 on Monday, following a nearly 18 percent surge on Friday.
- •Foreign investors and institutions sold a combined 4.77 trillion won in shares, while retail investors bought a net 4.65 trillion won.
- •Samsung Electronics dropped 8.76 percent and SK hynix fell 8.79 percent as profit-taking targeted semiconductor stocks that had surged near daily limits in the prior session.
- •Oil refiners declined, with S-Oil losing 4.4 percent and GS slipping 4.94 percent, as crude prices eased after US-Iran military tensions de-escalated.
- •The Korean won weakened to 1,429.8 against the US dollar, down 5.8 won from the previous trading close.
South Korean equities tumbled more than 5 percent on Monday as investors rushed to lock in gains in semiconductor shares following a record-breaking rally in the previous session. The local currency also weakened against the US dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) dropped 338 points, or 5.12 percent, to close at 6,257.45. The plunge came after the index surged nearly 18 percent on Friday.
Trading volume remained thin at 270.9 million shares valued at 26.1 trillion won ($18.2 billion). Advancing issues narrowly outpaced declining ones, with 454 gainers versus 417 losers.
Foreign investors and institutions were net sellers, dumping a combined 4.77 trillion won in shares. Retail investors absorbed much of the selling, purchasing a net 4.65 trillion won.
Lee Kyoung-min, an analyst at Daishin Securities, attributed the market's decline to profit-taking by foreign investors, particularly in semiconductor stocks.
On Friday, shares of Samsung Electronics and SK hynix — South Korea's two dominant chipmakers — had surged close to the daily permissible limit, driven by expectations that the unwinding of leveraged exchange-traded funds was nearing completion. Sentiment had also received a partial boost from declining oil prices after US President Donald Trump announced he had called off a potentially large-scale military assault on Iran.
The chipmakers are among the most heavily weighted components on the KOSPI, and their outsized moves can swing the broader index disproportionately. Their sharp swings this session underscore how concentrated South Korea's market is in semiconductor names that are sensitive to global demand cycles and artificial intelligence infrastructure spending.
Large-cap shares closed mixed on Monday. Market bellwether Samsung Electronics fell 8.76 percent to 239,500 won, while rival SK hynix shed 8.79 percent to 1,567,000 won.
Oil refiners also declined as crude prices eased following the de-escalation of US-Iran tensions. S-Oil dropped 4.4 percent to 121,700 won, and GS, the parent company of refiner GS Caltex, slipped 4.94 percent to 84,600 won.
Among the session's gainers, Hyundai Motor rose 1.29 percent to 393,000 won, and defense contractor Hanwha Aerospace edged up 0.22 percent to 919,000 won.
The Korean won was quoted at 1,429.8 against the US dollar as of 3:30 p.m., down 5.8 won from the previous stock trading close. (Yonhap)