KOSPI Sinks 4.91% as Samsung Earnings Surprise Sparks Semiconductor Selloff

KOSPI closes at the 7,600 level despite Samsung’s record earnings

Foreign investors extend net-selling streak to 13 straight sessions

Program sell-order curb triggered early in the session

Circuit breaker halts trading for the sixth time this year

South Korea’s KOSPI tumbled nearly 5% on July 7, closing at the 7,600 level as heavy foreign selling battered the market. The slump was driven by broad profit-taking across semiconductor shares led by Samsung Electronics, even after the company posted record quarterly earnings that beat market expectations.

The KOSPI ended at 7,656.31, down 395.02 points, or 4.91%, from the previous session. After opening 1.64% lower, the benchmark’s losses widened to more than 8% intraday, triggering a circuit breaker that suspended trading for 20 minutes. It was the sixth time this year that a circuit breaker was triggered on the main bourse. Earlier, at 10:23:41 a.m., program sell orders were suspended for five minutes.

On the main board, foreign investors sold a net 3.3835 trillion won, while institutions sold a net 685.8 billion won, pulling the index lower. Foreigners extended their net-selling streak to 13 consecutive trading days. Retail investors bought a net 3.9182 trillion won, but that was not enough to offset the decline.

Investors dumped Samsung shares even after the company announced preliminary second-quarter results that topped forecasts, treating the earnings release as a catalyst that had run its course. Samsung Electronics reported operating profit of 89.4 trillion won for the second quarter, up 1,810% from a year earlier and above the market consensus of about 84 trillion won. Excluding bonus-related provisions, the company effectively earned more than 106 trillion won in the second quarter alone.

Even so, Samsung Electronics fell 6.92%, dropping to the 290,000-won range. Other semiconductor-related shares also closed sharply lower, including SK Hynix, down 6.06%, Samsung Electro-Mechanics, down 9.85%, Hanmi Semiconductor, down 7.06%, and LG Innotek, down 4.8%.

Among the top 10 KOSPI stocks by market capitalization, SK Square fell 9.3%, LG Energy Solution lost 6.35%, Samsung C&T dropped 5.56%, Samsung Life Insurance slid 4.7%, and Hyundai Motor declined 4.48%. KB Financial Group rose 1.35%, while Samsung Biologics gained 1.21%.

The Kosdaq closed at 831.23, down 15.84 points, or 1.87%, from the previous session. After opening 0.39% lower, the index briefly turned positive early in the session before reversing lower again in morning trade. At one point, losses widened to more than 4%.

On the Kosdaq, retail investors sold a net 411.8 billion won and institutions sold a net 23.4 billion won. Foreign investors bought a net 435.6 billion won.

Semiconductor materials, parts and equipment stocks also slumped on the Kosdaq. Wonik IPS fell 9.48%, Leeno Industrial lost 4.01%, EO Technics dropped 6.92%, PSK slid 5.27%, and Jusung Engineering declined 3.36%. Among the top 10 Kosdaq stocks by market capitalization, Rainbow Robotics fell 4.27%, Ecopro lost 1.29%, and Ecopro BM slipped 1.23%. Kolon TissueGene rose 6.91%, HLB gained 6.05%, ABL Bio advanced 4.1%, and Alteogen added 1.96%.

Ko Jeong-sam, Hankyung.com reporter jsk@hankyung.com