Kospi Slides 5.2% After Samsung Electronics Results Trigger Profit-Taking
Summary
- The Kospi plunged more than 5%, with foreigners and institutions posting net sales of 1.6818 trillion won and 570.8 billion won, respectively.
- Retail investors were net buyers of 2.2181 trillion won on the Kospi, but that was not enough to defend the index from further losses.
- Despite Samsung Electronics posting second-quarter results of 171 trillion won in revenue and 89.4 trillion won in operating profit, a record quarterly performance, profit-taking added downward pressure on the index.
Forecast Trend Report by Period
Kospi tumbles more than 5%; sell-side sidecar triggered
South Korea’s Kospi index fell more than 5% intraday on July 7, slipping into the 7,600 range. The benchmark came under pressure as investors took profits in Samsung Electronics despite the chipmaker’s record second-quarter earnings.
As of 10:36 a.m., the Kospi was down 419.01 points, or 5.2%, at 7,632.32. The index opened 1.64% lower and widened its loss to as much as 6% early in the session, briefly falling into the 7,500 range. At 10:23:41 a.m., program sell orders on the main board were halted for five minutes.
On the Kospi, foreign investors were net sellers of 1.6818 trillion won and institutions sold a net 570.8 billion won. Retail investors bought a net 2.2181 trillion won, but that was not enough to stop the slide.
The selling appeared to be driven by profit-taking after Samsung Electronics reported strong second-quarter results. The company said consolidated revenue for the quarter rose 129.3% from a year earlier to 171 trillion won, while operating profit surged 1,810.3% to 89.4 trillion won.
Operating profit far exceeded the market estimate of 8.5 trillion won and topped the company’s full-year operating profit of 43.6011 trillion won last year. It was the largest quarterly operating profit on record.
Other top-10 Kospi stocks by market capitalization also traded lower, including SK Hynix, SK Square, Samsung Electro-Mechanics, Hyundai Motor, LG Energy Solution, Samsung Life Insurance, Samsung C&T, Samsung Biologics and KB Financial Group.
The Kosdaq index was down 10.82 points, or 1.28%, at 836.25 at the same time. It opened 0.39% lower, turned higher early in the session and held gains for a time before reversing lower again around 10:13 a.m.
On the Kosdaq, retail investors were net sellers of 222.8 billion won, while foreigners bought a net 97.8 billion won and institutions purchased a net 128.8 billion won.
Among the Kosdaq’s largest stocks, EcoPro BM, EcoPro, Rainbow Robotics, Wonik IPS and LEENO Industrial fell. Alteogen, Jusung Engineering, Kolon TissueGene, HLB, ABL Bio and LigaChem Biosciences advanced.
Ko Jeong-sam, Hankyung.com reporter, jsk@hankyung.com
Korea Economic Daily
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