South Korea’s KOSPI index retreated to the 6,600 level, falling more than 3% intraday. With foreign and institutional investors selling in tandem, market bellwethers Samsung Electronics and SK Hynix also succumbed to declines of around 3%. As semiconductor stocks — the axis of the recent rally — waver, investor anxiety is deepening.

According to the Korea Exchange on September 2, as of 9:50 a.m., the KOSPI was trading around the 6,600 level, down more than 2% from the previous session. The index opened at 6,625.47, down 3.08%, and remained weak throughout the session. The KOSDAQ also started at 802.80 before sliding to 796.34 intraday, surrendering the 800 level.

Large-cap semiconductor stocks fell in unison. At the same time, Samsung Electronics traded at 253,000 won (approximately $190), down 3.07% from the previous close, while SK Hynix fell 3.07% to 1.641 million won (approximately $1,200).

On the supply-demand front, selling pressure from foreign and institutional investors was pronounced. Intraday, foreign investors and institutions each recorded net selling in the 700 billion won range (approximately $514.6 million) on the main KOSPI board. Retail investors, by contrast, stepped in with net purchases exceeding 1 trillion won (approximately $735.1 million), absorbing the bulk of shares unloaded by the two seller groups.

Foreign investors’ net selling has persisted for several sessions. After net selling 3.8763 trillion won (approximately $2.8 billion) on August 24 and 4.0001 trillion won (approximately $2.9 billion) on August 25, foreign investors extended their selling streak to four consecutive sessions through September 2. Institutional investors also posted net selling for a fourth straight session over the same period.

Closing Results: Losses Widen into the Close

At the close, the KOSPI’s decline was even steeper than intraday levels. The index finished at 6,562.72, down 273.08 points (3.99%) from the previous session — a larger drop than the 2%-plus decline recorded at 9:50 a.m. The KOSDAQ, however, recovered some ground after sliding to 796.34 intraday, closing at 803.98, down 17.27 points (2.10%).

Selling pressure persisted through the close. Foreign investors sold a net 1.9195 trillion won (approximately $1.4 billion) and institutions a net 2.0433 trillion won (approximately $1.5 billion), bringing combined selling to roughly 4 trillion won (approximately $2.9 billion). Retail investors absorbed a significant portion with net purchases of 2.3023 trillion won (approximately $1.7 billion), but could not fully absorb the selling wave, which was heavier than the intraday pace of roughly 700 billion won each from foreign and institutional sellers.

Category9:50 a.m. (Intraday)CloseKOSPI6,600 level, down 2%+6,562.72 (-3.99%)KOSDAQ796.34, broke below 800803.98 (-2.10%)Foreign investorsNet selling in 700B won rangeNet selling of 1.9195T wonInstitutional investorsNet selling in 700B won rangeNet selling of 2.0433T wonRetail investorsNet buying over 1T wonNet buying of 2.3023T won
Earnings Momentum Intact… Market Leadership Rotating

Securities analysts note that despite the recent correction in semiconductor stocks, earnings momentum itself remains valid. According to Shinhan Securities, the KOSPI’s 12-month forward earnings per share (EPS) revision rate stands at positive 5.2% over the past month. However, the pace of both share price gains and earnings growth in semiconductors has slowed compared to earlier periods.

Semiconductors still contribute the most to earnings growth. Over both one-month and three-month horizons, the IT sector has been the largest contributor to 12-month forward net profit growth. Recently, however, contributions from energy and industrials have risen, and financials have turned positive, indicating a broadening of earnings improvement across sectors.

Lee Jung-bin, an analyst at Shinhan Securities, said: “The recent market is going through a process where leadership is shifting as the pace of earnings momentum decelerates, rather than a phase where earnings improvement is disappearing. The practical benefit of a strategy that selects sectors and stocks with sustained earnings improvement is expanding, rather than focusing on the overall market direction.”

Buybacks Providing Downside Support… What Comes After?

Market observers note that share buybacks are underpinning the South Korean equity market amid external headwinds. Buybacks by Samsung Electronics and SK Hynix are serving as a floor for share prices, but uncertainty is growing over which direction stocks will move once this “buyback magic” fades.

For SK Hynix in particular, there are forecasts that its target price could be revised downward due to Samsung Electronics’ catch-up in HBM4, while news of China’s CXMT beginning production of fifth-generation HBM is also heightening wariness toward Korean semiconductor names. Reports that SK Hynix is considering establishing a semiconductor plant in Japan have added to volatility across the sector.

Indeed, on August 31, LS Securities analyst Jung Woo-sung lowered SK Hynix’s target price by 27.3%, from 3.3 million won (approximately $2,400) to 2.4 million won (approximately $1,800). Jung cited expectations that HBM operating margins will decline from the previously estimated 80% to around 60% next year, reflecting the possibility that Samsung Electronics’ entry into the HBM4 market will ease the premium stemming from supplier concentration. Conversely, for Samsung Electronics, Jung raised the target price by 12.5% from 400,000 won (approximately $290) to 450,000 won (approximately $330), citing the expansion of HBM4’s share of total HBM shipments from roughly 5% in Q1 to 35% in Q2.

CompanyPrevious TargetRevised TargetChangeSK Hynix3.3M won2.4M won-27.3%Samsung Electronics400K won450K won+12.5%

(Source: LS Securities, published August 31, 2026)

Attention is also focused on where capital exiting semiconductors will flow. While there are views that secondary battery, shipbuilding, and defense stocks could emerge as new market leaders, some analysts caution that the recent surge in secondary battery stocks — driven by ESS (energy storage system) demand — needs to be examined for differences from past rallies. Power equipment and utility stocks also face concerns over short-term overheating.

The underperformance of the KOSDAQ is also deepening. Analysts continue to examine why the KOSDAQ, which has been relatively weak compared to the KOSPI, is lagging further behind. Discussions among investors are also active regarding when foreign investors’ “Sell Korea” campaign will end and what policy lessons can be drawn from the leveraged ETF incident.