The South Korean Kospi Composite Index fell nearly 9% on Monday, primarily driven by significant stock declines from SK Hynix and Samsung Electronics. SK Hynix, which had recently debuted on the Nasdaq, saw its shares plunge approximately 15%, while Samsung fell nearly 11%. This sharp decline pushed the Kospi to its lowest level since May, marking a 26% drop from its year-to-date peak of 9,387.

SK Hynix had a notable Nasdaq debut on Friday, raising $26.5 billion by selling 177.9 million American Depositary Receipts at a price of $149 each. The stock initially rose by about 13% on its first trading day, but the situation turned sour as investors opted to sell off their shares post-listing. Analysts suggest that this behavior reflects a common market trend, where investors buy ahead of significant events, only to sell immediately afterward. A senior analyst at NH Investment & Securities indicated that profit-taking and concerns over the company's upcoming second-quarter earnings contributed to the downturn.

Other companies affiliated with SK Hynix also experienced steep declines, with SK Square dropping 15% and Samsung Electro-Mechanics falling 17%. This broader sell-off extended to various US chip stocks, including Micron Technology and Western Digital, which each experienced nearly 6% and 7% declines, respectively.

The overall market sentiment was further strained by escalating geopolitical tensions between the US and Iran, particularly following Iran's closure of the Strait of Hormuz, which prompted US airstrikes. The ensuing conflict has implications for oil prices, with Brent crude rising to $79 per barrel and WTI reaching $74.30, causing additional pressure on South Korean markets that heavily rely on oil imports. Investors appear cautious as the Kospi slips below vital support levels, with the next key threshold around 5,850.

The ongoing volatility in the semiconductor sector, exacerbated by international concerns, has left many investors on edge. As the market navigates these challenges, the focus will likely remain on the performance of major players such as SK Hynix and Samsung, along with developments in US-China relations that could further impact the tech landscape.

This material is for informational purposes only and does not constitute financial advice.