KOSPI falls nearly 5% on tech weakness after Samsung earnings beat

Samsung shares plunge 6.92% after earnings beat forecasts

South Korea’s benchmark stock index fell nearly 5 percent on Tuesday, the latest in a series of sharp swings in Seoul’s market this year. The KOSPI opened 1.6 percent lower and accelerated declines through the session, closing at 7,656.31 after touching an intraday low that triggered a trading halt.

The selloff was led by technology stocks after Samsung Electronics Co. reported preliminary second-quarter operating profit of 89.4 trillion won, beating market forecasts. Rather than lifting shares, the strong result prompted profit-taking. Samsung Electronics plunged 6.92 percent to 296,000 won, and chip giant SK hynix declined 6.06 percent to 2,201,000 won. SK hynix is preparing a $29 billion U.S. listing later this week.

Trade volume was heavy at 512.29 million shares worth 39.66 trillion won ($25.9 billion), with decliners outnumbering gainers 509 to 358. Institutions and foreign investors sold a net 309.1 billion won and 2.92 trillion won worth of stocks, respectively, while individuals purchased a net 3.13 trillion won.

The Korea Exchange activated a circuit breaker that suspended trading of KOSPI-listed shares for 20 minutes after the index fell more than 8 percent during the session. It was the latest market-halt event in a period that has seen the KOSPI crash 10 percent on June 23 and drop 8.3 percent on June 8, as well as surge more than 8 percent on June 9.

Analysts said investors are focusing on whether rising capital spending, intensifying competition and expanding production capacity will generate the earnings growth needed to justify elevated valuations of technology companies.

Beyond tech, the selloff spread across major sectors. Top carmaker Hyundai Motor dropped 4.48 percent to 479,000 won, and defense company Hanwha Aerospace shed 3.19 percent to 1,122,000 won.

Hanwha Ocean plunged 22.65 percent to 89,800 won after a South Korean consortium that includes the shipbuilder failed to win Canada’s multibillion-dollar submarine procurement project.

Among gainers, cosmetics maker Amorepacific rose 4.2 percent to 126,500 won, and leading refiner SK Innovation climbed 7.56 percent to 103,800 won.

The Korean won was trading at 1,528.20 per U.S. dollar as of 3:30 p.m., down 2.1 won from the previous session.

Bond prices closed lower. The yield on three-year Treasurys rose 0.4 basis point to 3.780 percent, and the return on five-year government bonds climbed 0.8 basis point to 3.999 percent.