KOSPI slips as investors turn cautious ahead of Samsung's 2Q earnings results

SEOUL, July 6 (AJP) - South Korea's benchmark KOSPI surrendered an early gain of nearly 3 percent on Monday and ended lower, as foreign and institutional investors resumed selling ahead of Samsung Electronics' preliminary second-quarter earnings set to be announced on Tuesday, which are seen as a key test of whether last week’s chip selloff was excessive.

The index shed 37.01 points, or 0.46 percent, to close at 8,051.33.

The retreat masked a split in the chip trade. Samsung Electronics rose 2.8 percent to 318,000 won (US$208), while SK hynix fell 3.4 percent to 2,343,000 won (US$1,529), as investors positioned for Samsung's results rather than a broad recovery in memory chipmakers, bruised by Meta Platforms' push into selling spare AI computing power.

The KOSPI opened higher and climbed as far as 8,327.26 in the first hour before reversing through the session. Foreign investors net sold 1.31 trillion won worth of KOSPI shares and institutions offloaded 1.43 trillion won, while individuals bought 2.65 trillion won.

The anxiety traces to reports that Meta is building a cloud business to sell its excess AI computing capacity, which traders read as a sign the AI buildout may be running ahead of demand, an argument aimed squarely at the memory suppliers feeding it.

That reading drove the KOSPI's 7.9 percent plunge last Thursday, followed by a 5.8 percent rebound the following day. Selling on Monday again clustered in names tied to the memory supply chain. Samsung Electro-Mechanics sank 8.1 percent to 1,828,000 won ($1,193), and SK square, the largest shareholder of SK hynix, dropped 5.9 percent to 1,495,000 won ($976).

Autos cushioned the index. Kia jumped 5.7 percent to 160,700 won ($105) and Hyundai Motor added 2.0 percent to 502,000 won ($328).

The tech-heavy KOSDAQ fell harder, losing 21.34 points or 2.5 percent to close at 847.07.

The won traded at 1,531.90 per dollar, weakening 2.90 won from the previous session.

Elsewhere in the region, Japan's Nikkei 225 closed nearly flat at 69,737.69, down 0.01 percent, with chip names mixed as Kioxia lost 2.1 percent and Tokyo Electron fell 1.2 percent while Advantest gained 0.8 percent. The Shanghai Composite rose 0.2 percent to 4,051.31.

Meanwhile, Samsung is set to release its preliminary results on Tuesday, while SK Hynix is due on July 29. Analysts say a strong result could revive the chip-driven rally, but a weak one would deepen doubts after three sharp selloffs in the past month.

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