South Korea's KOSPI gave up the 7,000 level on the first trading day after the Chuseok holiday, as Samsung Electronics and SK hynix each fell more than 5% and foreign and institutional investors sold heavily. A surge in long-term U.S. Treasury yields and elevated international oil prices during the holiday weighed on the market.
The KOSPI closed at 6,889.74 on the 28th, down 191.18 points, or 2.70%, according to the Korea Exchange. It was the first close below 7,000 in four trading sessions. The index opened at 7,057.86, down 23.06 points or 0.33%, and losses widened through the session. Foreign investors sold a net 3.24 trillion won and institutions a net 1.02 trillion won, while retail investors bought a net 2.61 trillion won, cushioning the decline. The KOSDAQ opened at 845.48, up 1.00 point or 0.12%, and finished at 846.58, up 2.10 points or 0.25%.
Weakness in large-cap chip stocks stood out. Samsung Electronics ended at 270,000 won, down 5.43% from the previous session. The stock opened at 284,500 won, down 0.35%, and briefly recovered to the prior close before losses accelerated sharply. SK hynix closed at 1,768,000 won, down 5.05%. It opened at 1,825,000 won, down 1.99% from the previous session, and drifted lower through the day.
Brokerages said negative factors that had built up — high interest rates, high oil prices and the continuing conflict in the Middle East — combined with bearish developments during the holiday to hit the market. The yield on the 30-year U.S. Treasury note climbed as high as 5.519% during the break, the highest since June 14, 2004, while oil prices rose for two straight days on escalating tensions between the United States and Iran, approaching $100 a barrel again. Analysts also pointed to reports that Solidigm, an SK hynix sub-subsidiary, is preparing an initial public offering in the United States as a source of downward pressure on the chipmaker.
Samsung Electronics and SK hynix were the two most heavily sold stocks by foreign investors. Foreigners sold a net 1.73 trillion won of SK hynix and 1.38 trillion won of Samsung Electronics. Institutions also sold the most in Samsung Electronics, at 664.4 billion won, followed by SK hynix at 491 billion won, concentrating the selling in large-cap semiconductor names.
