KOSPI plunges more than 3% as Samsung, SK hynix shares tumble

The KOSPI index experienced a sharp decline of over 3% on Monday, as the performance of Samsung Electronics and SK hynix shares dragged down the overall market. This downturn marked a reversal from the previous two days, when the index had seen gains due to expectations that the semiconductor giants would contribute positively to shareholder returns.

The benchmark index commenced trading 31.88 points, or 0.46%, lower at 6,881.07, only to plunge further by closing 215.99 points, or 3.12%, lower at 6,696.96. Foreign investors played a significant role in this sell-off, disposing of a net 3.69 trillion won worth of KOSPI shares. Institutional investors followed suit, selling 1.29 trillion won.

In contrast, retail investors bucked the market trend by making net purchases of 3.32 trillion won, which somewhat mitigated the losses. The magnitude of the losses in Samsung Electronics and SK hynix shares was largely attributed to the differences in shareholder return measures announced last week. Last Wednesday, SK hynix announced plans to repurchase 40 trillion won worth of its own shares and to retire them fully, while also committing to return at least 50% of its free cash flow to shareholders.