South Korean stocks reversed an early gain on Tuesday as renewed foreign selling and weakness in the country’s two biggest chipmakers overwhelmed an otherwise supportive lead from Wall Street.
The KOSPI opened 0.58% higher but was down 0.56% at 6,964.85 by 11:20 am in Seoul, slipping back below the closely watched 7,000 level.
Foreign investors sold a net 737.2 billion won of shares, while institutions bought 141.9 billion won.
Samsung Electronics fell over 1% and SK Hynix dropped 2.66%, leaving Seoul notably weaker than several other Asian markets.
Foreign selling overwhelms the Wall Street tailwind
The reversal stands out because the external equity backdrop was supportive.
The Nasdaq rose 1.05% to a record close overnight, while the Dow gained 0.18%. Japan’s Nikkei 225 also rose about 0.4% on Tuesday as electronics and financial shares advanced.
The problem for Korea is that the bond market has not joined the risk rally. The US 10-year Treasury yield remains around 5.3%, near its highest level since 2002.
That increases the discount rate applied to future earnings and makes richly valued technology shares harder to justify.
More importantly, Tuesday’s selling is part of a longer trend. Foreign investors unloaded a net 20.3 trillion won of KOSPI shares between September 1 and October 2.
SK Hynix and Samsung accounted for roughly 17.2 trillion won, or about 85%, of the total.
Memory stocks are doing most of the damage
The KOSPI’s weakness is therefore less a broad rejection of Korean equities than another test of its unusually heavy semiconductor concentration.
SK Hynix was one of the biggest drags on the benchmark on Tuesday, while Samsung also turned lower. That is happening despite extraordinarily strong industry fundamentals.
South Korea’s semiconductor exports surged 262.8% from a year earlier to a record $60.3 billion in September, according to the Ministry of Trade, Industry and Resources.
The disconnect points more towards positioning and valuation than deteriorating memory demand.
Investors have already enjoyed a powerful AI-memory trade, while 5%-plus US yields are making them more reluctant to chase those stocks higher.
Kiwoom Securities researcher Han Ji-young told MoneyToday that Samsung’s earnings later this week could determine whether clearer trends in share prices and investor flows begin to emerge from next week.
Samsung earnings could decide what happens next
Samsung Electronics’ preliminary third-quarter results, expected later this week, are now the KOSPI’s most important near-term catalyst.
A strong report could reinforce the argument that AI and memory earnings growth is powerful enough to overcome the interest-rate burden. It could also help reverse persistent foreign selling.
There is another complication. Samsung Futures researcher Jung Hee-chan told MoneyToday that the completion of large share-buyback programmes risks removing an important source of demand that has absorbed selling pressure in recent months.
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