Kospi Triggers Sell-Side Curb as Profit-Taking in S7 Stocks Sends Index Down 3.5%; SK Hynix Briefly Falls Below 2 Million Won

The Kospi was tumbling on July 13, triggering a temporary curb on program sell orders as investors rushed to lock in gains in the seven market leaders known as the “S7.” SK Hynix briefly fell below 2 million won during the session.

Even as the benchmark index slumped, market breadth on the main board showed some easing in concentrated investor positioning, with advancing issues outnumbering decliners.

As of 10:41 a.m., the Kospi was at 7,213.20, down 262.74 points, or 3.51%, from the previous session.

The index had traded near flat early in the session and briefly rose above 7,500, but began plunging at about 9:30 a.m. At around 10:34 a.m., the Korea Exchange imposed a sell-side sidecar on the main board, suspending the validity of program sell orders for five minutes.

Institutional profit-taking was driving the retreat. Institutions were net sellers of 608.2 billion won worth of stocks on the main board. As of the 10 a.m. tally, the four biggest net-sold names were SK Hynix with 80.6 billion won, Samsung Electro-Mechanics with 21.4 billion won, Samsung Electronics with 16 billion won and Samsung Electronics preferred shares with 6.4 billion won.

Foreign investors were net sellers of 491.6 billion won worth of stocks on the Kospi. They were also selling Kospi 200 futures, with net sales of 411.1 billion won.

Retail investors were net buyers of 1.1135 trillion won.

Large-cap stocks were mixed.

All seven of the so-called S7 stocks that had led the market higher were falling sharply. Samsung Electronics dropped 3.95%, SK Hynix lost 8.21%, SK Square slid 9.65%, Samsung Electronics preferred shares fell 5.04%, Samsung Electro-Mechanics sank 12.31%, Samsung Life Insurance declined 4.11% and Samsung C&T dropped 3.96%.

SK Hynix briefly broke below the 2 million won level during the session.

By contrast, other heavyweight stocks were higher, including Hyundai Motor, up 1.64%, LG Energy Solution, up 4.75%, KB Financial Group, up 2.28%, and Samsung Biologics, up 2.58%.

There were 473 advancing issues, compared with 400 decliners.

The Kosdaq was at 836.30, down 1.13 points, or 0.13%, from the previous session. The junior index had risen more than 2% early in the day, but sentiment weakened as the Kospi slid sharply.

On the Kosdaq, retail and institutional investors were net buyers of 133.5 billion won and 115.9 billion won, respectively, while foreign investors sold 248.3 billion won.

Most of the top Kosdaq stocks by market capitalization were higher.

Alteogen rose 1.85%, but other biotech stocks were weaker, including Kolon TissueGene, down 5.67%, ABL Bio, down 0.61%, Samchundang Pharm, down 2.86%, and LigaChem Biosciences, down 0.67%.

Semiconductor materials, parts and equipment stocks were also higher. Wonik IPS gained 8.48%, PSK rose 4.65%, Leeno Industrial added 3.93%, Jusung Engineering advanced 2.81% and EO Technics climbed 2.51%.

Rainbow Robotics fell 3.2%.

In Seoul's foreign-exchange market, the won weakened 6.7 won, or 0.45%, to 1,505.2 per dollar.

Han Kyung-woo, Hankyung.com reporter, case@hankyung.com