South Korea's KOSPI fell 2.62% to 6,625.93 as foreign and institutional investors sold heavily, overshadowing Samsung Electronics' record third-quarter profit forecast.
SEOUL — South Korean stocks fell for a third session on Thursday, and the KOSPI closed down 177.97 points, or 2.62 percent, at 6,625.93, as foreign and institutional selling outweighed a record profit forecast from Samsung Electronics. The exchange was shut Friday for a holiday, so the print stands until Monday.
The index opened slightly higher, at 6,808.68, and reversed. Selling picked up in the afternoon as futures and options expired together, and the low of the day was near 6,620. Decliners beat advancers 625 to 252. Foreign investors sold a net 1.99 trillion won, about $1.5 billion. Institutions sold about 1.67 trillion won. Retail investors bought a net 2.90 trillion won and did not stop the decline. The Kosdaq fell 3.01 percent to 892.27. The won was quoted at 1,338.5 to the dollar at 3:30 p.m., firmer than 1,340.4 at the previous close.
Samsung's preliminary third-quarter figures were the number the session was supposed to trade. Operating profit was forecast at 107.4 trillion won, up 782.5 percent from a year earlier, a record, on demand for artificial-intelligence memory. Revenue was forecast at 195 trillion won, up 126.6 percent. Chip shares still led the selling, and the selling spread past them into autos and chemicals.
The overnight lead was lower. The Dow fell 0.66 percent and the Nasdaq 0.22 percent. The U.S. 10-year Treasury yield was around 5.33 percent after briefly topping 5.36 percent, the highest since 2002. Oil prices added to the inflation worry. Yonhap said investors were wary because higher oil is feeding prices and the Federal Reserve has signaled it may need to raise rates this year. Wednesday's close of 6,803.90 was already the lowest since Sept. 17. Thursday took another 178 points off that.
A profit print that large, sold on the day it is published, is a market trading the discount rate and an expiry, not the earnings. Samsung's guidance says the memory cycle is still paying. A 10-year yield at a 24-year high says the multiple on that profit is what foreigners are cutting. Retail buying of 2.9 trillion won is the other side of the same trade.
Kim Dae-jun of Korea Investment & Securities said this week that liquidity had dried up compared with the first half, and that a sharp recovery in large caps was hard to expect in that setting. Huh Jae-hwan of Eugene Investment Securities said the weakness was foreign selling on anxiety over high bond yields. Thursday added the options expiry to that account. The 6,625.93 close is the mark that has to be lived with over a three-day weekend. Samsung's 107.4 trillion won is a forecast. The foreign sale is a filing of a different kind.
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