Foreign selling keeps the KOSPI behind Taiwan even after Samsung's 107 trillion won quarter

Samsung Electronics fell 2.42% to 262,000 won on Thursday and SK hynix 2.44% to 1.68 million won ^[7], both less than the index's 2.62% ^[1]. The two carry heavy weight in the KOSPI ^[15], so the rest of the board had to fall by more than 2.62% on a weighted average to produce that close ^[21]. Hanwha Aerospace lost 8.33% and HMM 2.8% ^[8]. The Dow had dropped 0.66% overnight ^[6]. Seoul's benchmark fell about four times as far ^[22].

Thursday, then, looks like an oil-and-Fed selloff ^[3] in a market that falls further than its peers on the same news ^[22]. Seoul Economic Daily's memory explanation fits the longer record. The index sits about 27.3% below its June 22 record of 9,114.55 ^[11][23]. From that date the Nasdaq gained 5.24% and the S&P 500 4.40% through Oct. 7, Taiwan's Taiex rose 3.29% through Oct. 8, and Japan's Nikkei 225 fell 4.82% ^[12]. All of them traded through 10-year Treasury yields above 5% and doubts about the pace of AI development ^[2].

The paper's argument is that Korea holds its AI exposure mostly in Samsung and SK hynix, so any concern that memory prices and profit growth are nearing a peak moves the whole index ^[15]. Taiwan's gains are spread across chip design, foundry services, packaging, networking and servers ^[16]. The US rebound leaned on Nvidia, Alphabet and the rest of the Magnificent Seven, and Japan's on chip equipment and testing stocks ^[17]. Samsung's 107 trillion won quarter ^[10] shows what the memory cycle is paying now. Investors pricing a peak care about how long it keeps paying, and I think a quarter that large can feed that worry as easily as calm it.

Foreign investors sold a net 48.6 trillion won of main-board shares in June, 9.9 trillion in July, 10.2 trillion in August, 21.5 trillion in September and 6.4 trillion in the first eight days of October, about 96.6 trillion won in all, concentrated in the two chip makers ^[18]. The total is roughly nine-tenths of Samsung's third-quarter operating profit ^[24] (a flow set against earnings, so a measure of scale and nothing more). The selling did not weaken the currency on Thursday: the won firmed to 1,338.5 per dollar from 1,340.4 ^[9]. Seoul Economic Daily does not say where the money went.

If memory prices do peak, the concentration keeps costing the index on each soft data point ^[15]. Seoul Economic Daily reports that securities analysts see a recovery in demand for the large-cap chip stocks foreigners have been selling as the key to a rebound ^[20]. Should oil and the Fed stay in control, the KOSPI will keep falling further than its comparison markets on the same headlines, as it did on Thursday ^[22].

I think the structural account explains the four-month gap and says little about Thursday. The counter-case is in the same data: an index with this makeup is still up by more than half for the year ^[14]. The flow half of the thesis fails if foreign selling of Samsung and SK hynix stops and the KOSPI still trails the Taiex. It fails from the other side if the index keeps dropping more than its two chip giants on oil days ^[21].