A widespread sell-off of semiconductor stocks sparked a sharp single-day drop across South Korean equities on Wednesday, dragging most other major Asian benchmark indexes into negative territory as investor sentiment turned bearish for the region’s tech manufacturing sector.
The downward spiral began at South Korea’s leading memory chipmaker SK Hynix, which saw its share price plummet 12.6% by midday trading in Seoul. The steep decline came despite the firm reporting that its full-year operating profit had surged sixfold year-over-year to a new all-time high of 60.5 trillion won, equal to roughly $41.2 billion. Market participants reacted negatively to the results after the company’s fourth-quarter earnings fell short of the consensus forecasts compiled by Wall Street analysts, triggering a wave of panic selling that spread across the entire chipmaking sector.
South Korea’s benchmark Kospi Composite Index absorbed the full brunt of the selling pressure, sinking 8% to 5,547.77 by the midpoint of the daily trading session. Industry peer Samsung Electronics, the world’s largest memory chip manufacturer, could not escape the rout, with its share price falling 8% to add more downward momentum to the broader index.
The negative sentiment spilled over across regional markets, leaving most major Asian benchmarks in the red by the middle of the trading day. Japan’s Nikkei 225, one of the region’s most closely watched large-cap indexes, declined by 1.1% from its previous close. Taiwan’s Taiex, which is heavily weighted toward the global semiconductor industry, fell an even steeper 3.6%. In mainland China, the Shanghai Composite Index also posted a modest loss of 0.5%, extending the broad-based downturn across Asian equity markets.