SEOUL, October 26 (AJP) - Foreign investors kept selling South Korean stocks on Monday, dragging the benchmark Korea Composite Stock Price Index (KOSPI) back below 5,500 now that the chipmaker buybacks that once absorbed their selling have run out.
The index shed 80.71 points, or 1.5 percent, to 5,469.6, off nearly 40 percent from its June peak.
Foreigners sold a net 816.5 billion won ($617.1 million) of KOSPI shares. The KOSDAQ, Korea’s tech-heavy secondary market, fell 3.3 percent to 727.2 ahead of SK hynix’s earnings on Wednesday and a U.S. Federal Reserve rate decision this week.
Institutions bought a net 698.9 billion won and individuals 77.3 billion won, short of the foreign outflow. Decliners outnumbered gainers 793 to 100.
Brokerages say buying support has thinned since Samsung Electronics and SK hynix completed large share buyback programs, leaving the market more exposed to foreign flows.
The main index in Seoul briefly turned positive, touching 5,565.7, before foreign selling pulled it to a session low of 5,455.1.
The two chipmakers parted ways. SK hynix slipped 0.2 percent to 1,275,000 won ($963.6) after surrendering a gain of more than 2 percent, while Samsung Electronics fell 1.2 percent to 213,000 won ($161.0).
SK hynix has found support since Friday, when it said it had stopped reviewing a pre-IPO round and a U.S. listing for Solidigm, its U.S.-based NAND flash subsidiary. Brokerages read the move as easing concern over duplicate listings in the SK group’s ownership chain.
Wednesday’s results will be SK hynix’s first earnings report since the decision, and the company has yet to say how it will fund Solidigm’s expansion without outside capital.
Financials and automakers led large-cap losses. KB Financial Group fell 3.8 percent to 147,200 won ($111.3), and Hyundai Motor lost 2.5 percent to 288,000 won ($217.7).
On the KOSDAQ, Shinhan Investment analyst Kang Jin-hyuk pointed to weakness in materials, parts and equipment heavyweights such as EcoPro and Jusung Engineering.
The won strengthened 2.9 won to 1,323.1 per dollar.
Japan’s Nikkei 225 fell 503.51 points, or 0.8 percent, to 62,189.7 for a third straight decline as doubts over artificial intelligence monetization weighed on chip-related heavyweights including Tokyo Electron and Advantest.
Brokerages see little room for a quick recovery. Kim Dae-jun of Korea Investment & Securities flagged 5,200 as a potential floor, equivalent to one times 12-month forward book value, citing persistent foreign selling and thinning turnover.
SK hynix’s results now sit at the center of the week. A strong quarter could give buyers a reason to step back in, while a miss would leave the market leaning on a valuation floor about 5 percent below Monday’s close.
AJP Takeaways
- Foreign investors sold a net 816.5 billion won ($617.1 million) of KOSPI shares, pushing the main index below 5,500 with chipmaker buybacks no longer absorbing the outflow.
- The KOSPI closed nearly 40 percent under its June record, while the tech-heavy KOSDAQ fell 3.3 percent.
- SK hynix’s results on Wednesday sit at the center of the week, with Korea Investment & Securities flagging 5,200 as a potential floor.
Tags: KOSPI, KOSDAQ, SK hynix, Samsung Electronics, Solidigm, KB Financial Group, Hyundai Motor, Korea Investment & Securities, Shinhan Investment, Federal Reserve, Nikkei 225, Tokyo Electron, Advantest
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