South Korea’s stock market is signaling a sharply lower open as it digests a barrage of accumulated external headwinds from the holiday period. A plunge in U.S. semiconductor stocks combined with geopolitical risks emanating from the Middle East sent Samsung Electronics and SK Hynix down more than 5% each in pre-market trading before the regular session.
According to Nextrade (NXT) as of 8:10 a.m. on the 20th, Samsung Electronics was trading at ₩242,000 (approximately $162.63), down ₩13,000 (5.10%) from the previous session. SK Hynix fell ₩103,000 (5.59%) to ₩1.74 million (approximately $1,168.62). Other large-cap stocks also weakened broadly, including SK Square (-7.01%), Samsung Electro-Mechanics (-7.75%), Hyundai Motor (-4.59%), and LG Energy Solution (-2.84%).
The sell-off was primarily driven by a semiconductor-led correction in U.S. markets during the holiday. Despite TSMC, the world’s largest contract chipmaker, reporting earnings that beat market expectations, concerns over slowing artificial intelligence (AI) demand and the technological catch-up potential of latecomers like China’s CXMT triggered a wave of profit-taking. As a result, the Philadelphia Semiconductor Index dropped more than 4% over the two-day holiday period, while the tech-heavy Nasdaq Composite also fell over 1%.
Geopolitical uncertainty further dampened investor sentiment. During the holiday, the U.S. escalated military pressure with additional airstrikes against Iran, while Iran announced it had intercepted some vessels attempting to transit the Strait of Hormuz. The renewed tensions in the Middle East have rapidly eroded risk appetite across global financial markets.
Securities analysts argue the sell-off is largely exaggerated, driven more by sentiment and supply-demand dynamics than by any deterioration in corporate fundamentals. Lee Kyung-min, an analyst at Daishin Securities, noted, “The Kospi’s 12-month forward price-to-earnings ratio (PER) has entered historically undervalued territory at 5.8 times. We view the early-to-mid 6,000-point range as a zone where rebound potential outweighs downside risk.”
Han Ji-young, an analyst at Kiwoom Securities, highlighted that the market’s reaction function itself is changing. “The triggers for this correction—CXMT’s listing, delays in U.S. data center construction, and slowing semiconductor profit growth—were all headwinds that surfaced multiple times in the first half of the year,” Han said. “Back then, semiconductor profit upgrades, the expanding AI narrative, and upward Kospi target revisions offset the negatives and drove a bull market. Now, the market is reacting much more sensitively.”
Han added, “The Kospi is expected to find downside support in the early-to-mid 6,000-point range. The key question is how much of the recent cascade of losses can be recovered through major events scheduled this week.”
Market participants are closely watching supply-demand dynamics from foreign and institutional investors after the regular session opens. Given that foreigners maintained a net-selling stance, particularly in semiconductor stocks, ahead of the holiday, the intensity of their selling today is seen as a critical variable determining the extent of further market declines.
Meanwhile, Japan’s stock market also showed weakness centered on semiconductor-related stocks during the holiday, mirroring the global deterioration in semiconductor investment sentiment. Japanese chip equipment makers such as Tokyo Electron and Advantest fell in succession, with the sell-off spreading across Asia.