Seoul Stocks Plunge Over 5% After Record Surge, Driven by Semiconductor Profit-Taking
Quick Look
- Seoul's KOSPI index plunged 5.12% after a record 18% surge, primarily due to foreign investors engaging in profit-taking on semiconductor stocks like SK hynix and Samsung Electronics.
- Investor sentiment was partially lifted by declining oil prices.
AI-generated summary
Why It Matters
The KOSPI index had surged nearly 18% on Friday, with semiconductor stocks like SK hynix and Samsung Electronics rising significantly due to assessments that leveraged ETF unwinding was ending.
SEOUL, Aug. 3 (Yonhap) -- Seoul stocks plunged by more than over 5 percent Monday, as investors went to lock in profits of semiconductor heavyweights following a record surge the previous session.
The benchmark Korea Composite Stock Price Index (KOSPI) fell 338 points, or 5.12 percent, to 6,257.45.
The index surged by nearly 18 percent on Friday.
The market was weighed on by foreign investors who went profit-taking, especially in semiconductor stocks, Lee Kyoung-min, an analyst from Daishin Securities, said.
Shares of SK hynix and Samsung Electronics -- the country's two chip giants -- rose by almost the daily permissible limit on Friday, on the assessment that the unwinding of leveraged exchange-traded funds is nearing its end.
Investor sentiment was also partially lifted on declining oil prices, after U.S. President Donald Trump said he has canceled a potentially massive military assault on Iran.
Open Questions
- How long will the profit-taking continue?
- What is the specific impact on individual investors?
- Will the unwinding of leveraged ETFs fully conclude soon?
