South Korean Stocks Slide As Chip Selloff Deepens: Samsung, SK Hynix Fall As Foreign Investors Sell 604.8 Billion Won

South Korean stocks fell sharply on Monday, 12 October, as renewed attacks in the Middle East, elevated oil prices, and persistent concerns over interest rate hikes weighed on sentiment.

The KOSPI index dropped 1.73% to 6,511.13 as of 10:27 am IST, with chipmakers Samsung Electronics and SK Hynix leading losses. Foreign investors sold a net 604.8 billion won worth of South Korean shares, adding to the pressure on the market.

The decline followed a long weekend in South Korea, leaving investors to react to fresh concerns about energy supply disruptions and the outlook for borrowing costs. The market also faced pressure from worries over valuations in the artificial intelligence sector, while expectations of further monetary tightening kept investors cautious.

Why Are South Korean Stocks Falling Today?

Renewed attacks across the Middle East have raised concerns about possible disruption to energy supplies and global trade. Saudi Arabia reported a fresh attack on Riyadh's international airport on Sunday, following an earlier strike that killed people and injured hundreds. The developments have unsettled markets across Asia as investors assess the risk of a wider conflict.

Oil prices remained volatile amid supply concerns. Brent crude initially rose 0.7% to $105.45 a barrel after the airport strikes and a fresh tanker attack near the Strait of Hormuz. It later slipped below $104 to around $103.51 in early Asian trade. US West Texas Intermediate crude gained 0.5% to $92.27 a barrel.

Higher energy costs are adding to inflation concerns just as markets assess the possibility of further interest rate increases. Traders are pricing in about a 70% chance of the Bank of Korea raising rates by a cumulative 50 basis points over the next six months. South Korean government bonds, meanwhile, advanced on Monday. The yield on the three-year Treasury bond fell 4.8 basis points to 3.946%, while the benchmark 10-year yield declined 6.6 basis points to 4.328%.

How Are Samsung Electronics And Other Major Stocks Performing?

Chipmakers were among the biggest drags on the KOSPI. Samsung share price fell 1.43%, while SK Hynix share price declined 2.44%. The weakness comes as investors continue to assess concerns about demand for artificial intelligence and the outlook for technology stocks.

Other major companies also traded lower. Samsung BioLogics slipped 1.97%, and POSCO Holdings lost 1.31%. Gains in a few stocks offered some support: Kia Corp rose 1.69%, while LG Energy Solution added 0.25%. Hyundai Motor was unchanged.

Foreign investors' net selling of 604.8 billion won added another headwind for equities. The South Korean won moved in the opposite direction, strengthening 0.44% against the US dollar to 1,336.1 per dollar on the onshore settlement platform. In offshore trading, it gained 0.3% to 1,335.6 per dollar.

What Should Investors Watch Across Global Markets?

Investors are tracking inflation data from the US and Europe due this week, along with scheduled speeches by central bank officials. US consumer price figures and an appearance by Federal Reserve Chair Kevin Warsh are expected to draw attention as markets look for clues on the path of interest rates.

A stronger-than-expected US inflation reading could renew pressure on bonds by raising expectations of more aggressive monetary tightening. The 10-year US Treasury yield approached 5.4% last week, its highest level since 2002. The US dollar, meanwhile, held within a narrow range after recording its fourth consecutive weekly gain, supported by oil prices and demand for safer assets.

US stock futures edged higher after a volatile week on Wall Street. The S&P 500 reached a record on Tuesday before falling over the following two sessions on concerns about AI demand, then rebounded on Friday.

Japan's markets remained closed for Sports Day on Monday. In India, GIFT Nifty pointed to a muted opening with a positive bias, while domestic investors entered a crucial week after Friday's recovery produced the first green weekly candle following eight consecutive weeks of losses.

Despite Monday's decline, the KOSPI remained up 54.51% so far in 2026. The won has strengthened 7.7% against the dollar over the same period.

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