Invest2 publishers2 min readPublished
KOSPI falls below 7,000 as tech shares slide amid foreign selling of 1.75 trillion won
Foreign investors sold a net 1.75 trillion won of Korean shares on Tuesday as the KOSPI fell 0.89% to 6,941.39. Chipmakers led a drop that left breadth near even, so global bond yields are steering the index until third-quarter earnings give investors company numbers to price.
The Investor · Invest desk
Drafted by a language model from the sources cited here and checked against its claim ledger before publication. How we use AISend a correction
What happened
- Individuals bought a net 740.56 billion won, while institutions were close to flat with net sales of 1.98 billion won.
- Trading was light, at 257.27 million shares worth 19.1 trillion won.
- LG Electronics jumped 7.64% to 232,500 won after securing a long-term deal with a North American company to supply chillers for AI data centers.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- contradiction Yonhap blamed global yields at multidecade highs while Korean government bond yields fell and the won firmed, so whatever rate pressure hit Seoul came through equity selling, with local rates moving the other way.
- constraint With foreign net selling at about 9% of a light session's turnover, one investor group can move the KOSPI while most stocks barely change, so the index level is a weak guide to Korean breadth until volume returns.
- exposure Individuals covered about 42% of the foreign sale, so if foreign selling resumes before earnings, retail money is the largest reported buyer at prices that have not yet met third-quarter numbers.
Decliners outnumbered gainers 459 to 424 [7], so about 52% of the stocks that moved went down [18]. The index still lost 62.35 points from a prior close of 7,003.74, and it had opened higher [1][13]. A loss that size on breadth that even has to come from the largest stocks. Tech stocks led the market down [2], and SK hynix fell about two and a half times as far as Samsung Electronics in percentage terms [19].
Foreign net selling came to about 9.2% of the session's 19.1 trillion won turnover [15]. Individual buying covered about 42% of it [16]. Institutional net selling was roughly 0.01% of turnover [21], so institutions sat the day out. The reported figures do not net to zero. Every share sold has a buyer, so about 1.01 trillion won of net buying [17] came from investors outside the three groups Yonhap listed.
Yonhap put the fall down to global bond yields at multidecade highs [2], pushed up by higher interest rates, elevated energy costs and renewed inflation worries [8]. Korea's own bond market rallied [14]. The three-year government bond yield fell 0.4 basis point, and the five-year fell 1.2 basis points to 4.117% [14]. The currency also moved against the sellers: the won edged up to 1,343.6 per dollar from 1,344 [12], a gain of about 0.03% [20].
The Yonhap reports do not break foreign selling down by stock. Linking foreign sellers to chipmakers in particular is an inference from which shares fell [3][5].
I think the evidence supports a narrower claim. Global yields are weighing on the chipmakers that led the decline. Elsewhere, company news still set prices the same afternoon: Samsung SDI rose 8.7% [11], and LG Electronics gained on its data-center chiller contract [10].
Yonhap reported that investors were expected to stay cautious until a fresh policy catalyst or strong corporate earnings arrived [9]. If foreigners keep selling while chipmakers post strong third-quarter results, rates are setting the price [8]. Weak chip results would mean the yield story was covering for a company problem. One light session can also simply reverse. A quicker test comes before earnings. If SK hynix and Samsung Electronics keep falling on days when global yields retreat, the rate explanation is wrong [5].
What to watch
- Samsung Electronics' and SK hynix's third-quarter results, and whether foreign net selling of Korean shares continues once they are out.
- How chip shares trade on days global bond yields fall; continued declines would point to company-specific selling.
- The won against 1,343.6 per dollar: sustained foreign selling that starts to weaken the currency would change the read from equity selling to capital leaving Korea.