Markets
South Korea's Kospi Fell 3.65% After a Long Weekend, Down Almost 9% in Four Sessions
The Kospi closed at 6,384.24 on October 12, its worst day since September 2, as foreign investors sold 2.02 trillion won of Korean stocks. Samsung fell 4.39% despite record quarterly results, and the Kosdaq lost 4.83%.
Korean markets reopened on Monday, October 12, after a holiday on Friday, and the first session made up for lost time. The Kospi fell 241.69 points, or 3.65%, to 6,384.24, its biggest one-day drop since September 2 and its lowest close since August 11. It touched 6,368.49 before the close. The tech-heavy Kosdaq did worse, falling 4.83% to 849.19.
It was the fourth straight losing session. From its October 2 close of 7,003.74, the Kospi has now lost 619.50 points, or 8.85%, falling through 7,000, 6,500 and 6,400 along the way. The previous session, on October 8, it had already dropped 2.62%.
Chipmakers were at the centre of the selling. Samsung Electronics fell 4.39% to 250,500 won and SK Hynix 4.52% to 1,605,000 won, while SK Square, which holds a large stake in SK Hynix, lost 6.29%. Samsung's drop came days after it reported record third-quarter results. Local analysts linked the selling to the renewed worries about AI spending that hit US chip stocks on October 8, after a report that OpenAI's revenue was well below earlier estimates, and to doubts about whether Korean memory makers can keep pace in high-bandwidth memory, the chips used in AI servers.
The flows tell the story. Foreign investors sold a net 2.02 trillion won of Korean stocks on Monday, about $1.5 billion, and institutions sold another 110.7 billion won. Individual investors bought 1.47 trillion won, absorbing most of it. The won, oddly, strengthened to about 1,335 per dollar, so the move wasn't a currency panic. US stock futures were up about 0.3% at the same time.
The next tests come quickly. TSMC and ASML report this week, giving the first direct read on AI chip demand of the earnings season, and SK Hynix and Samsung follow later in October. Korea's market is far more dependent on memory chips than the US, so it tends to react harder in both directions. Our new guide explains why foreign investor flows matter so much for markets like Korea's.