The trading board at Hana Bank's headquarters in Jung-gu displays real-time Kospi and Kosdaq readings alongside the won-dollar exchange rate on Tuesday. [Yonhap]
The trading board at Hana Bank's headquarters in Jung-gu displays real-time Kospi and Kosdaq readings alongside the won-dollar exchange rate on Tuesday. [Yonhap]

The Kospi plunged more than 4 percent intraday Tuesday, threatening the 6,400 level, as a selloff in semiconductor stocks on Wall Street combined with heavy foreign selling on the domestic market.

Samsung Electronics and SK hynix extended their declines even after announcing shareholder return plans, with concerns over the semiconductor industry outlook and profit-taking pressure weighing on overall investor sentiment.

According to Korea Exchange, the Kospi opened down 161.03 points, or 2.40 percent, at 6,535.93 before extending its losses. At its intraday low, the index fell as far as 6,408.82, a drop of 4.30 percent, briefly threatening the 6,400 line.

Foreign investors have been net sellers on the Kospi for three consecutive sessions through Tuesday, offloading a net 864.6 billion won ($626 million) in shares. Retail investors remained net buyers at 688 billion won, continuing the trend from Monday, while institutions were also net buyers at 75 billion won.

The decline tracked weakness on Wall Street, where major technology stocks fell overnight. The Nasdaq Composite and the S&P 500 dropped 0.76 percent and 0.28 percent, respectively, while the Dow Jones Industrial Average edged up 0.26 percent.

Analysts attributed the weakness to growing political pressure for regulation of AI data centers and to the Donald Trump administration's additional economic measures against Iran, both of which dampened investor appetite.

Semiconductor stocks were hit particularly hard after reports that Yangtze Memory Technologies, China's leading NAND flash chipmaker, had filed for an initial public offering — following the recent listing of DRAM rival CXMT, the other major Chinese memory chip producer.

SanDisk fell 6.45 percent, Seagate dropped 6.51 percent, Micron lost 5.83 percent, Western Digital slid 5.24 percent, and SK hynix's American depositary receipts declined 4.92 percent. The Philadelphia Semiconductor Index fell 2.70 percent. Nvidia, set to report earnings this week, dropped 2.91 percent, extending its losing streak to seven consecutive sessions.

Two factors that had recently weighed on stocks showed some relief, however. The yield on the 30-year US Treasury fell more than 4 basis points to 5.23 percent, while the 10-year yield dropped more than 3 basis points to around 4.70 percent. October futures for West Texas Intermediate crude oil fell 2.35 percent overnight.

On the domestic market, lingering disappointment over the shareholder return announcements from Samsung Electronics and SK hynix — both touted as record-scale measures — continued to drag on the broader index.

Samsung Electronics was trading down 3.70 percent from Monday at 247,500 won, having fallen more than 3 percent from the open and briefly touching 245,000 won, a drop of 4.67 percent, in early trade. SK hynix was down 5.33 percent from Monday at 1.58 million won, having opened with a loss of more than 4 percent before extending its decline.

Despite both stocks suffering sharp drops of 8.70 percent and 3.41 percent, respectively, on Monday, selling pressure tied to disappointment over the semiconductor sector appears to be outpacing bargain-hunting demand.

Samsung Electronics unveiled a large-scale shareholder return plan after the close of regular trading on Friday, but the market had been hoping for a concrete share buyback and cancellation program. When that failed to materialize, the announcement triggered a "sell-on-news" reaction — a price decline despite positive news — as disappointed investors unwound positions.

SK hynix, by contrast, decided to buy back and cancel shares worth 40 trillion won. Because its parent holding company, SK Square, is required under the Fair Trade Act to maintain a stake of at least 20 percent in SK hynix, canceling treasury shares would actually reduce the regulatory burden on the group.

Even so, with both stocks falling in tandem, some market observers are speculating that large investors may be treating the companies' large-scale buybacks — conducted to fund employee stock compensation and share cancellations — as an opportunity to take profits.

Among other large-cap stocks, those linked to major domestic chipmakers are seeing the steepest declines. SK Square, Samsung Electro-Mechanics, LG Energy Solution, Samsung Biologics and Samsung C&T are all trading lower. Hyundai Motor, Hanwha Aerospace, Shinhan Financial Group, Doosan Enerbility and Hana Financial Group are posting gains.

Kosdaq is also under pressure, opening down 6.40 points, or 0.79 percent, at 806.93 before quickly deepening its losses. On the Kosdaq, foreign investors and institutions — both of which were net buyers on Monday — have flipped to net selling, offloading 50.9 billion won and 39.6 billion won, respectively. Retail investors are the sole net buyers, picking up 95.7 billion won.


th5@heraldcorp.com