KOSPI tumbles despite chip buybacks: how much support can they really provide?

South Korean stocks sank on Wednesday as a renewed surge in oil prices and global bond yields hit the KOSPI’s heavyweight technology and industrial names, turning Seoul into one of Asia’s weakest major markets.

The KOSPI was down 2.86% at 6,640.26 by late morning after opening more than 3% lower.

Samsung Electronics fell 2.97% and SK Hynix lost 3.13%, while Hyundai Mobis, HD Hyundai Heavy Industries and Hanwha Aerospace also declined sharply.

The selloff followed another risk-off session on Wall Street and came as Brent crude approached $96 a barrel, reviving inflation and rate concerns.

Samsung and SK Hynix lose their recent cushion

The KOSPI’s weakness is notable because Samsung and SK Hynix had helped stabilise the benchmark only a day earlier through large share-buyback programmes.

Foreign and institutional investors returned as sellers on Wednesday morning, while retail investors bought the dip.

As per market data, foreigners sold a net 56.6 billion won and institutions 10.2 billion won early in the session. Samsung traded more than 3% lower at one stage and SK Hynix fell as much as 3.6%.

Kiwoom Securities researcher Han Ji-young told The Asia Business Daily that Korean equities have become unusually sensitive to negative macro variables, particularly oil prices and long-term yields.

In her assessment, investors now need to watch whether US-Iran tensions ease and whether bond markets in the US and Japan can stabilise.

That leaves Korea’s strong AI-memory story temporarily overshadowed by macro risk.

Higher oil hits Korea from two directions

Brent climbed towards $95.91 a barrel after renewed US strikes on Iran raised fears of further disruption around the Strait of Hormuz. US crude also moved above $90.

For South Korea, the problem is broader than energy-company margins.

The country depends heavily on imported fuel, so a sustained oil spike threatens corporate costs, household inflation and the trade balance.

Higher crude is also pushing global yields upwards. The US 10-year Treasury yield reached about 4.81%, close to a three-year high, increasing the discount rate applied to growth stocks.

That pressure lands disproportionately on Samsung, SK Hynix and other technology-heavy KOSPI constituents.

Nikkei and Asia confirm this is a global rates shock

The selloff spread across the region. Japan’s Nikkei 225 dropped about 2.2% to 64,742, with SoftBank down 4.1%, Advantest 4% lower and Tokyo Electron falling 4.5%.

MSCI’s broad Asia-Pacific index excluding Japan fell roughly 1.5%, while US equity futures were slightly weaker after the S&P 500 lost 0.7% and the Nasdaq dropped 1% overnight.

The immediate question for Seoul is whether buybacks and strong semiconductor fundamentals can again attract buyers around the 6,600 area.

An analyst cited by The Asia Business Daily said Samsung and SK Hynix repurchases could continue cushioning supply-demand conditions into the third-quarter earnings season, although buybacks alone cannot indefinitely offset broad investor selling.