Kospi Falls 3.7% Below 6,400 on 10th Day of Foreign Selling

South Korea's Kospi fell 3.65% to 6,384.24 on Monday as foreign investors sold for a tenth straight session, pulling Samsung Electronics and SK hynix down more than 4%.

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South Korea's benchmark Kospi index fell 3.65% to 6,384.24 on Monday, October 12, dropping below 6,400 as foreign investors extended their selling to a tenth consecutive session. Samsung Electronics (005930.KS) closed down 4.39% at 250,500 won, and SK hynix (000660.KS) lost 4.52% to 1,605,000 won. The tech-heavy Kosdaq index fell 4.83% to 849.19. For investors tracking equity markets today, the session marked the sharpest single-day loss in Asia's most semiconductor-dependent major bourse in more than a month.

What Happened to the Kospi on Monday?

The Kospi lost 241.69 points on Monday, its fourth straight daily decline. Since October 6 the index has shed 619.50 points, or 8.85%, breaking through the 7,000, 6,500 and 6,400 levels in turn.

Foreign investors net sold 2.02 trillion won ($1.51 billion) of shares on the main board. That brought October's foreign selling to nearly 10 trillion won, after net outflows of 21.5 trillion won in September. Chip stocks account for most of it. SK hynix and Samsung together made up about three-quarters of September's foreign net selling.

Domestic retail investors bought a net 1.47 trillion won but could not offset the outflow. Holding company SK Square fell 6.3% to 984,000 won. Market turnover is roughly 70% below its May peak, which leaves the index more sensitive to large orders.

The won strengthened against the dollar on the day, a sign that the selling is a repricing of Korean equities rather than a currency-driven exit.

Why Are Foreign Investors Selling Korean Stocks?

Foreign investors are selling mainly because of rising global borrowing costs and doubts over how long the memory-chip upcycle will last. The U.S. 10-year Treasury yield stood above 5.2% on Monday, its highest level since the early 2000s. Higher yields raise the discount rate applied to growth stocks and draw capital back toward dollar assets.

The timing stands out. Samsung reported third-quarter operating profit of 107.4 trillion won ($80.5 billion), up 782.5% from a year earlier. It is the first time a Korean company has topped 100 trillion won in a single quarter. Investors treated the result as a chance to take profits rather than a reason to buy.

A second pressure is the sustainability of artificial intelligence spending. Questions over OpenAI's reported revenue pushed the Nasdaq down 1.25% at one point in recent sessions, and the doubts have spread to the memory suppliers that benefit from AI data-center build-outs. Micron Technology (MU) rose 12% on Friday, but Samsung and SK hynix gained less than 1% in the Korean session that followed, a muted reaction to a strong signal.

How Much Support Is Left From Buybacks and Valuations?

Corporate share repurchases have largely run their course as a support for the market. Samsung and SK hynix launched a combined buyback program of about 55 trillion won. Samsung completed its portion on October 6, the day the Kospi's slide began, and SK hynix is in the final stages. With that bid gone, the two stocks are more exposed to foreign and institutional flows. Institutions were also net sellers in recent sessions.

Valuations offer a counterweight. The Kospi trades at about 5.26 times 12-month forward earnings, near a historic low. A move to a forward multiple of 6 would correspond to an index level near 7,700. Low multiples have not stopped the selling so far, since the market weighs peak-cycle earnings against the risk of a downturn in memory prices.

Policymakers have responded. South Korea's finance minister pledged stabilization measures, and the Bank of Korea governor apologized for having endorsed single-stock leveraged exchange-traded products, saying the central bank had not fully grasped their volatility during the May downturn. The remarks point to concern over retail leverage in a market this concentrated in two stocks.

What Comes Next for Korean Equities?

The next catalysts are external. U.S. September consumer price data is due October 14 and producer prices on October 15. A hotter reading would push Treasury yields higher and extend pressure on Asian equities. A softer one would give foreign investors a reason to pause.

Earnings from TSMC (TSM) and ASML (ASML) this week will test the demand picture for advanced chips and equipment. SK hynix reports on October 27, and Samsung holds its earnings conference call on October 29. Those will show whether pricing for high-bandwidth memory and conventional DRAM holds up as hyperscalers review capital spending.

Seoul's market structure raises the stakes. Two companies dominate Kospi's market capitalization, so a sustained foreign exit from them moves the whole index, as Monday's session showed.

Outlook

The Kospi has fallen almost 9% in four sessions, and a ten-day foreign selling streak has outlasted record corporate earnings and a finished buyback. Near term, direction depends on U.S. inflation data, Treasury yields and the chip-sector earnings that start this week. Valuations near historic lows set a floor for long-term buyers, but until foreign flows turn, the index stays tied to the two semiconductor heavyweights that make up much of its value.