KOSPI falls below 7,000 as chip heavyweights slide after Chuseok

The KOSPI index fell below 7,000 for the first time since the Chuseok holiday, slipping nearly 3% on Monday. Samsung Electronics and SK hynix, two heavyweights in the chip industry, led the decline in the market's first session after the Korean holiday. The benchmark index opened at 7,057.86, down 23.06 points or 0.33% from the previous close on Wednesday. Throughout the day, it continued to slide, ending the session at 6,889.74, a loss of 191.18 points or 2.70%.

Samsung Electronics experienced a 5.43% drop in share value, while SK hynix saw a 5.05% decrease. The decline in SK hynix shares was further exacerbated by a report suggesting that its NAND flash and solid-state drive subsidiary, Solidigm, might seek a U.S. initial public offering. This potential listing has raised concerns among investors about the potential dilution of existing shareholders' economic interests.

Analyst Kim Ki-baek from Shinhan Securities explained the drop, attributing it to the significant weakening of major chip stocks, coupled with a sharp rise in long-term U.S. Treasury yields. He noted that the sentiment towards parts of the artificial intelligence (AI) supply chain, particularly memory chips, had also played a role in the market's decline.