Kospi Falls 4.6%, Slips Below 6,100 as Chip Stocks Tumble

The Kospi index plunged more than 4% in early trading on Oct. 13, pressured by weakness in U.S. semiconductor shares and heavy selling by foreign investors.

As of 9:28 a.m., the benchmark index was down 295.52 points, or 4.63%, at 6,088.72 from the previous session. Foreign investors led the selloff, pushing the index below the 6,100 level. The Kosdaq index was also down 21.90 points, or 2.58%, at 827.90.

In the benchmark stock market, foreign investors were net sellers of 469.8 billion won, driving the decline. They also posted net selling of 63.7 billion won in Kospi 200 futures. Retail and institutional investors were net buyers of 300.9 billion won and 231.1 billion won, respectively.

Semiconductor stocks led the losses. Samsung Electronics and SK Hynix fell 4.79% and 5.17%, respectively. The drop was seen as reflecting mounting concerns over intensifying competition after Chinese memory-chip maker CXMT said it had made progress in DRAM technology development. U.S. semiconductor shares also weakened overnight as CXMT is reportedly set to launch a next-generation server product using the technology later this year.

Other market heavyweights also fell broadly. SK Square slid 7.01% and Samsung Electro-Mechanics dropped 5.92%, while Hyundai Motor and LG Energy Solution lost 5% and 4.65%, respectively. On the Kosdaq market, Alteogen fell 4.75%, EcoPro dropped 4.4%, EcoPro BM lost 5.97% and Rainbow Robotics declined 5.75%.

Overnight in New York, major stock indexes were mixed. The Dow Jones Industrial Average rose 0.38% to close at 51,850.55, while the S&P 500 and Nasdaq indexes fell 0.06% and 0.44%, respectively. In Seoul's foreign-exchange market, the won-dollar exchange rate stood at 1,337.2 won, up 1.4 won from the previous session.