Shares of South Korea's semiconductor giants, Samsung Electronics and SK Hynix, closed sharply lower. Analysts attribute the decline to a combination of rising market interest rates, profit-taking, and concerns over labor issues at Samsung, which have dampened investor sentiment.
On May 15, the Korea Exchange reported that Samsung Electronics fell by 25,500 won (-8.61%) to close at 270,500 won. SK Hynix also dropped 15,000 won (-7.66%) to finish at 1,819,000 won.
Samsung started the day steady but quickly expanded its losses in the morning, dipping below 260,000 won at one point. SK Hynix initially rose to 1,995,000 won but reversed course and increased its losses.
The downturn in the two leading semiconductor stocks contributed to a sharp decline in the KOSPI index, which had briefly surpassed the 8,000 mark earlier in the day. The KOSPI closed down 488.23 points (-6.12%) at 7,493.18, marking a decline after three consecutive days of gains.
Foreign investors sold a net 5.6195 trillion won worth of stocks on the main bourse. Market analysts noted that the rise in U.S. 10-year Treasury yields above 4.5% and the won-dollar exchange rate surpassing 1,500 won prompted foreign profit-taking.
In the Seoul foreign exchange market, the dollar-won exchange rate rose by 9.8 won to close at 1,500.8 won.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The overheating from short-term surges and accumulated fatigue from rising prices, combined with concerns over interest rate hikes and higher bond yields, triggered the expanded losses." He added, "The weakness in the semiconductor sector was pronounced, as major memory chip stocks like Micron and SanDisk fell in the U.S. market, further dampening investor sentiment."
Concerns over a potential strike by Samsung's labor union have also contributed to the negative sentiment. The Samsung branch of the Federation of Korean Trade Unions has announced plans for an 18-day strike from May 21 to June 7.
Analysts predict that additional time may be needed for the KOSPI to stabilize above the 8,000 level. Lee noted, "It may take time for the KOSPI to break through and settle at the 8,000 index level, and whether financial investments will reverse to buying will determine the extent and duration of the corrections."
* This article has been translated by AI.
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