KOSPI falls 1.98% for second session as chip shares decline

South Korea’s KOSPI fell 1.98% to 6,803.90 in Seoul on Wednesday, Oct. 7, its second consecutive daily decline, as major chip stocks fell and foreign and institutional investors sold shares. The 137.49-point drop brought the benchmark close to the 6,800 level ahead of Samsung Electronics’ preliminary earnings report due Thursday.

The index opened at 6,864.25, down 1.11% from the previous close. SBS News reported that it briefly recovered during the session before turning lower and extending its losses. The closing fall was therefore steeper than the initial decline, despite a temporary rebound.

Foreign and institutional selling outweighed retail buying

Yonhap News Agency reported that foreign investors sold a net 2.59 trillion won of KOSPI shares and institutions sold 672.7 billion won, while individual investors bought a net 2.56 trillion won. SBS also reported net foreign and institutional selling alongside substantial buying by individuals, although its transaction totals differed slightly from Yonhap’s. The reported flows show that retail demand did not offset selling by the other two groups.

Yonhap put trading volume at 256.76 million shares, worth 19.69 trillion won. It counted 525 declining stocks and 332 advancing stocks, indicating that the fall extended beyond the largest chip companies. SBS reported declines in metals, transportation equipment and machinery shares, while medical and precision equipment, entertainment and textiles rose. Those sector moves show that the session was uneven even as the main index fell.

Samsung Electronics and SK hynix weighed on the index

Closing-price figures for the two chipmakers were not identical across the available reports. Financial News put Samsung Electronics at 269,500 won, down 0.92%, and SK hynix at 1,724,000 won, down 2.76%. The prices above use Yonhap’s account throughout; the difference does not affect the shared finding that both stocks declined. Financial News also reported the same KOSPI closing level and 1.98% index fall.

Samsung Electronics was scheduled to publish preliminary earnings guidance on Oct. 8. Lee Kyung-min, an analyst at Daishin Securities, told Yonhap that investors were waiting for that announcement, contributing to net selling by foreign and institutional investors. Financial News quoted KB Securities analyst Lim Jeong-eun as linking semiconductor weakness to caution about Samsung’s results. The earnings figures themselves had not been released during Wednesday’s trading session.

Bond yields and oil prices formed part of the market backdrop

Lee also told Yonhap that rising international oil prices and U.S. Treasury yields had renewed pressure on the KOSPI. SBS reported that the 10-year U.S. Treasury yield had moved above 5.3% and oil prices had rebounded. These are analysts’ and reporters’ explanations of market sentiment; the available accounts do not establish how much of the index’s decline was caused by any single factor.

The sell-off was not confined to the main exchange. SBS reported that the KOSDAQ index closed at 898.43, down 21.49 points, or 2.34%, taking it below 900. Financial News independently reported the same closing level and percentage fall. The separate index’s decline adds to the picture of weakness across South Korean shares on Wednesday.

South Korea’s currency moved in the other direction. Yonhap reported that the won stood at 1,340.4 per U.S. dollar at 3:30 p.m., compared with 1,343.6 at the previous trading session’s close. A lower number of won per dollar means the currency strengthened against the dollar, even as shares fell.

What investors were waiting for after the close

Samsung’s preliminary results were the next scheduled company update identified by the reports. Financial News also quoted Lim as pointing to an upcoming options expiry and the release of minutes from the U.S. Federal Reserve’s September meeting as events investors were watching. Those events had not resolved the uncertainty during the Oct. 7 session, and the reports offered no confirmed outcome from them. Wednesday’s established result was a second KOSPI decline, broad net selling by foreign and institutional investors, and losses for the two leading chip stocks.