South Korean stocks are set to open lower as investors take profits on large-cap chipmakers after the previous session's rally.
Samsung Electronics (005930.KS) was trading at 222,000 won as of 8:17 a.m. on the 22nd in the premarket session, which runs from 8 a.m. to 8:50 a.m., down 0.67% from its previous regular-session close of 223,500 won, according to Nextrade. SK hynix (000660.KS) was quoted at 1.274 million won at the same time, down 1.55%. The 567 stocks traded in the premarket session posted an average decline of 0.65%.
The KOSPI closed at 5,735.66 the previous day, up 182.92 points, or 3.29%. The main board also triggered a buy-side sidecar for the first time in about two months since Aug. 20. Samsung Electronics and SK hynix ended the regular session up 5.67% and 5.81%, respectively, levels at which share prices can swing more sharply on short-term trading.
U.S. stocks rose across the board overnight on strong technology earnings. The Nasdaq Composite gained 1.05%, the Standard & Poor's 500 rose 0.58% and the Dow Jones Industrial Average added 0.69% on the 21st. Results from Super Micro Computer and SpaceX eased concerns about demand for artificial intelligence investment, supporting buying in technology shares. AI cloud provider CoreWeave, however, closed down 0.5% after a volatile session.
Share price reactions to earnings were mixed. Meta rose more than 2% in after-hours trading after reporting revenue and guidance above market expectations, while chip equipment maker Lam Research fell more than 6% as its next-quarter outlook only slightly exceeded estimates. Tesla also weakened more than 2% in after-hours trading. Analysts said share prices remain highly sensitive to the elevated expectations built into AI stocks.
The KOSPI is expected to be volatile as improving sentiment toward the AI industry competes with profit-taking following the previous session's gains. The MSCI South Korea exchange-traded fund, an indicator of investor sentiment toward the domestic market, rose 1.88%, while KOSPI 200 night futures fell 0.53%.
"The market is expected to open lower today as investors take profits following the previous session's strength," said Seo Sang-young, an executive director at Mirae Asset Securities (006800.KS). "What happens next will be determined by foreign investor flows into chipmakers and by moves in international oil prices, which were one of the drivers of strength in U.S. equities."
"The market will be volatile as it digests some profit-taking after the short-term surge in the previous session," said Han Ji-young, an analyst at Kiwoom Securities (039490.KS). "Another concern is the widening gap in returns across sectors even during the rebound."
