Kospi plummets nearly 5% on tech weakness

Stocks plummeted nearly 5 percent Tuesday as technology shares extended losses after Samsung Electronics released its preliminary second-quarter earnings estimate. The local currency fell against the dollar.

After opening 1.6 percent lower, the Kospi extended losses, falling 395.02 points, or 4.91 percent, to close at 7,656.31.

Trade volume was heavy at 512.29 million shares worth 39.7 trillion won ($25.9 billion), with decliners outnumbering gainers 509 to 358.

Institutions and foreigners sold a net 309.1 billion won and 2.9 trillion won worth of stocks, respectively, while individuals purchased a net 3.1 trillion won.

Technology stocks plunged on profit-taking after Samsung Electronics estimated its operating profit for the April to June period at 89.4 trillion won, beating market forecasts.

Investors are now focusing on whether rising capital spending, intensifying competition and expanding production capacity will generate the earnings growth needed to justify elevated valuations of technology companies, analysts said.

In Seoul, technology shares led the decline.

Samsung Electronics plunged 6.92 percent to 296,000 won, while SK hynix declined 6.06 percent to 2,201,000 won ahead of its planned $29 billion U.S. listing later this week.

Carmaker Hyundai Motor dropped 4.48 percent to 479,000 won, and defense company Hanwha Aerospace shed 3.19 percent to 1,122,000 won.

Hanwha Ocean plunged 22.65 percent to 89,800 won after a Korean consortium that includes the shipbuilder failed to win Canada's multibillion-dollar submarine procurement project.

Among gainers, cosmetics maker Amorepacific rose 4.2 percent to 126,500 won, and refiner SK Innovation climbed 7.56 percent to 103,800 won.

The local currency fell 2.1 won from the previous session from the previous session to trade at 1,528.20 against the greenback at 3:30 p.m.

The Korea Exchange, the country's bourse operator, meanwhile, activated a circuit breaker for the benchmark index, suspending trading of Kospi-listed shares for 20 minutes after the index plunged more than 8 percent during the session.

Yonhap