SEOUL, October 6 (AJP) - Foreign investors dumped South Korea's memory chip giants again on Tuesday and pushed the Korea Composite Stock Price Index (KOSPI) back below 7,000. The slide came even as the Nasdaq hit an all-time high and Tokyo's Nikkei 225 closed above 70,000 for the first time in about three months.
SK hynix fell 3.7 percent and Samsung Electronics 1.4 percent as foreigners sold a net 1.75 trillion won ($1.30 billion) of main-board shares. Brokers tied the selling to U.S. long-term Treasury yields at their highest since 2002.
The cushion that has absorbed that selling, the two chipmakers' own share buybacks, is running down just as Samsung reports preliminary third-quarter results on Thursday. The tech-heavy KOSDAQ went the other way, jumping 3.0 percent on chip-equipment, battery and biotech names.
The main index in Seoul shed 62.4 points to 6,941.4.
It opened at 7,044.7 on Wall Street's tech rally, then gave up the gain and touched 6,897.4 before trimming losses.
Foreigners extended their selling streak to [CONFIRM: number of consecutive foreign net-selling sessions, from KRX investor-trend data] sessions. Individuals bought a net 742.3 billion won ($552.4 million), and institutions were roughly flat.
From Sept. 1 through Oct. 2, foreigners sold a net 20.3 trillion won ($15.1 billion) of KOSPI shares and were net buyers on only seven of 22 sessions, according to Korea Exchange (KRX) data cited by local media.
SK hynix closed at 1,773,000 won ($1,319.49). Samsung Electronics ended at 272,000 won ($202.43).
The gap follows the flows. Foreign ownership of SK hynix slid last week to its lowest since May 2023, local media reported, while Samsung's own buyback has been soaking up supply in its shares.
Last week, buyers the exchange classifies as "other corporations," which local brokers attribute largely to the two chipmakers' buybacks, took in 7.4 trillion won ($5.5 billion) of KOSPI shares. The purchases covered most of the 8.3 trillion won ($6.2 billion) foreigners sold.
Samsung's 15 trillion won ($11.2 billion) program is expected to wrap up this month. Analysts warn that removes the buyer that has held the main index in Seoul near 7,000.
Samsung Electro-Mechanics went against the chip slide and jumped 5.9 percent to 1,675,000 won ($1,246.56). The parts maker disclosed the same day a 285.6 billion won ($210.2 million) deal to supply multilayer ceramic capacitors for artificial intelligence (AI) servers to an unnamed global company through 2027.
LG Energy Solution climbed 5.1 percent to 390,000 won ($290.24). Investors are betting AI data centers will drive demand for energy storage systems.
The won held near 1,343.7 per dollar, about where it ended Monday. The steady currency points to chip positioning, not currency fear, as the driver of the selling.
The Nikkei in Tokyo rose 737.1 points, or 1.1 percent, to 70,684.0. The gain added to Monday's 2.4 percent jump, with chip-equipment maker Advantest among the largest contributors to the index.
The split is plain. Japan's chip toolmakers are drawing the AI money that Korea's memory makers are losing. If foreigners keep selling after Thursday's Samsung print, Seoul loses its last big buyer just as the buybacks run out.
AJP Takeaways
- Foreign investors sold a net 1.75 trillion won ($1.30 billion) of main-board shares and pushed the KOSPI below 7,000, as SK hynix fell 3.7 percent and Samsung Electronics 1.4 percent.
- The chipmakers' own share buybacks, which absorbed most of last week's foreign selling, are running down ahead of Samsung's preliminary third-quarter results on Thursday.
- The KOSDAQ rose 3.0 percent and Tokyo's Nikkei 225 closed above 70,000, while battery and parts makers in Seoul went against the chip slide.
Entity tags: Samsung Electronics; SK hynix; Samsung Electro-Mechanics; LG Energy Solution; Advantest; Korea Exchange (KRX); KOSPI; KOSDAQ; Nikkei 225; Nasdaq; U.S. Treasury yields; share buybacks; foreign investor flows
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