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

The KOSPI experienced a sharp decline of more than 3 percent on Monday, as the performance of Samsung Electronics and SK hynix shares dragged down the broader market. This marked a reversal of the gains made in the previous two sessions, which were fueled by expectations that the semiconductor giants would drive shareholder returns.

Initially, the index opened 31.88 points, or 0.46 percent, below its previous level at 6,881.07. However, it continued its downward trajectory to close at 6,696.96, marking a loss of 215.99 points, or 3.12 percent.

Foreign investors played a significant role in the selling, offloading a net 3.69 trillion won worth of KOSPI shares. Institutional investors also contributed to the downturn, selling 1.29 trillion won worth of securities. In contrast, retail investors bucked the overall trend with net purchases of 3.32 trillion won, helping to alleviate some of the market’s losses.

The magnitude of the losses in Samsung Electronics and SK hynix shares was largely due to the differing shareholder return measures announced last week. SK hynix had recently announced a plan to repurchase 40 trillion won worth of its shares and retire them in full, while committing to return at least 50 percent of its free cash flow to shareholders. These announcements resulted in a significant drop in the company's share price, which in turn weighed heavily on the KOSPI.