KOSPI falls below 7,000 as chip heavyweights slide after Chuseok
Stock indexes are displayed in the dealing room at Hana Bank’s headquarters in Seoul, Monday. The KOSPI closed at 6,889.74, down 191.18 points, or 2.70 percent, while the Kosdaq rose 2.10 points, or 0.25 percent, to 846.58. Yonhap
The KOSPI dropped nearly 3 percent Monday, falling below 7,000 as Samsung Electronics and SK hynix led losses in the first trading session after the Chuseok holiday.
The index opened at 7,057.86, down 23.06 points, or 0.33 percent, from its previous close Wednesday. It extended its losses through the session to finish at 6,889.74, down 191.18 points, or 2.70 percent.
Samsung Electronics slid 5.43 percent, while SK hynix fell 5.05 percent. SK hynix shares appeared to face additional pressure following a report that its NAND flash and solid-state drive subsidiary, Solidigm, could pursue a U.S. initial public offering. A potential listing has raised concerns about dilution of existing shareholders’ economic interests.
Investors also appeared to react to developments abroad while the Korean market was closed for the holiday.
“The KOSPI fell back below 7,000 as major chip stocks weakened amid a sharp rise in long-term U.S. Treasury yields,” said Kim Ki-baek, an analyst at Shinhan Securities. “Sentiment toward parts of the artificial intelligence (AI) supply chain, including memory chips, worsened after Oracle reportedly cited power supply disruptions in notifying developers of force majeure related to its AI data center business.”
The 30-year U.S. Treasury yield reached 5.519 percent during the holiday, its highest level since June 14, 2004. Oil prices also rose for two straight days as U.S.-Iran tensions intensified, approaching $100 a barrel.
Some of those pressures eased before the Korean market reopened. In a summit in Washington Thursday (local time), U.S. President Donald Trump and Chinese President Xi Jinping agreed to extend their trade truce by two months and continue talks.
Oil prices also declined in the previous session on hopes for U.S.-Iran negotiations. November West Texas Intermediate crude futures fell 2.33 percent, while November Brent crude futures lost 2.14 percent.
The Kosdaq, meanwhile, moved in the opposite direction, opening 1 point, or 0.12 percent, higher at 845.48 and closing at 846.58, up 2.10 points, or 0.25 percent.
In the Seoul foreign exchange market, the won weakened by 7.6 won against the dollar to close onshore trading at 1,365.1 won per dollar.