Kospi Drops 3.5%, Triggers Sell Sidecar as S7 Profit-Taking Sends SK Hynix Below 2 Million Won

The Kospi slumped sharply, triggering a sell sidecar, as investors rushed to lock in gains on the so-called S7 group of market leaders, including Samsung Electronics and SK Hynix. SK Hynix briefly fell below 2 million won during the session.

Even as the benchmark tumbled, market breadth pointed to easing concentration in investor sentiment. On the main board, advancing stocks still outnumbered decliners.

As of 10:41 a.m. on July 13, the Kospi was trading at 7,213.20, down 262.74 points, or 3.51%, from the previous session.

The index had traded around flat early in the day and briefly climbed above 7,500. It then turned sharply lower from around 9:30 a.m. At about 10:34 a.m., the Korea Exchange activated a sell sidecar on the main board, suspending program sell orders for five minutes.

Institutional profit-taking was a key driver of the selloff. Institutions were net sellers of 608.2 billion won worth of stocks on the main board. As of the 10 a.m. tally, the top four stocks by institutional net selling were SK Hynix at 80.6 billion won, Samsung Electro-Mechanics at 21.4 billion won, Samsung Electronics at 16 billion won and Samsung Electronics preferred shares at 6.4 billion won.

Foreign investors were also net sellers, unloading 491.6 billion won of shares on the main board. They were also selling 411.1 billion won of Kospi 200 futures.

Retail investors were net buyers of 1.1135 trillion won.

Moves among the largest companies by market value were mixed.

All of the S7 stocks that had led the market higher were falling sharply. Samsung Electronics was down 3.95%, SK Hynix 8.21%, SK Square 9.65%, Samsung Electronics preferred shares 5.04%, Samsung Electro-Mechanics 12.31%, Samsung Life Insurance 4.11% and Samsung C&T 3.96%.

SK Hynix, in particular, briefly broke below the 2 million won level during the session.

By contrast, other major stocks were higher, including Hyundai Motor, up 1.64%, LG Energy Solution, up 4.75%, KB Financial Group, up 2.28%, and Samsung Biologics, up 2.58%.

Advancing issues totaled 473, compared with 400 declining issues.

The Kosdaq was trading at 836.30, down 1.13 points, or 0.13%, from the previous session. It had risen more than 2% earlier in the day, but sentiment deteriorated as the Kospi plunged.

On the Kosdaq, retail and institutional investors were net buyers of 133.5 billion won and 115.9 billion won, respectively, while foreign investors sold 248.3 billion won.

Most of the Kosdaq's biggest stocks were higher.

Alteogen rose 1.85%, but other biotech shares were weaker, including Kolon TissueGene, down 5.67%, ABL Bio, down 0.61%, Samchundang Pharm, down 2.86%, and LigaChem Biosciences, down 0.67%.

Semiconductor materials, parts and equipment stocks were also stronger. Wonik IPS rose 8.48%, PSK gained 4.65%, LEENO Industrial added 3.93%, Jusung Engineering advanced 2.81% and EO Technics climbed 2.51%.

Rainbow Robotics fell 3.2%.

In Seoul's foreign-exchange market, the won weakened 6.7 won, or 0.45%, to 1,505.2 per dollar.

Han Kyung-woo, Hankyung.com reporter, case@hankyung.com