The South Korean benchmark Kospi experienced a significant downturn during intraday trading on Tuesday, defying expectations fueled by market titan Samsung Electronics’ announcement of a record-high quarterly operating profit earlier the same day.
The benchmark index commenced trading 1.64 percent lower at 7,919.20, subsequently deepening its losses to fall below the critical 7,400 mark, reaching a low of 7,389.22. By 2:50 p.m., the Kospi was recorded at 7,582.69, reflecting a sharp 5.82 percent drop from the previous session.
The market’s volatility prompted a sell-side sidecar activation at 10:23 a.m., temporarily halting program sell orders for five minutes. This was followed by a more drastic market-wide circuit breaker at 1:51 p.m., which suspended all trading on the main bourse for a full 20 minutes, underscoring the severity of the sell-off.
Tuesday’s substantial plunge caught the South Korean stock market largely by surprise, especially considering market heavyweight Samsung Electronics had just reported an unprecedented quarterly operating profit of 89.4 trillion won ($58.5 billion), significantly surpassing initial market expectations.
This sharp market sell-off indicated that investors were anticipating an even more substantial earnings surprise from key players. Instead, profit-taking emerged as the dominant short-term market driver, leading to widespread selling pressure despite strong corporate results.
The Kospi’s losses intensified as foreign investors aggressively increased their selling pressure right from the opening bell. By 2:50 p.m., foreign investors had executed net sales exceeding 3.75 trillion won, directly fueling the market’s pronounced decline.
Despite significant buying efforts from domestic retail investors, who purchased 3.43 trillion won, and institutional investors, with 23.9 billion won in net purchases, their collective buying power proved insufficient to counteract the overwhelming selling pressure from foreign entities.
Among the hardest hit large-cap stocks, Samsung Electronics saw its shares fall 6.92 percent to 296,000 won, while semiconductor giant SK hynix slid 6.53 percent to 2.19 million won as of 2:50 p.m.
The widespread sell-off affected numerous other prominent large-cap stocks. SK Square tumbled a significant 10.77 percent to 1.334 million won, and Samsung Electro-Mechanics experienced a considerable drop of 10.61 percent, settling at 1.634 million won.
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