South Korean Stocks Plunge 5.3% Despite Samsung's Record Profit Forecast

The main stock index of the Seoul Stock Exchange, the Kospi, experienced a sharp decline, falling 5.3% by mid-session on Tuesday. This significant drop occurred despite positive news from Samsung Electronics, the country's largest company by market capitalization, which announced record profit forecasts for the second quarter.

Just over two hours after the market opened, the Kospi index had decreased by 426.50 points, reaching 7,624.83. This follows a 0.46% decrease in the previous trading session. The severity of the downturn prompted the Korea Exchange to activate a 'sell-side' circuit breaker on the Kospi futures index for five minutes, suspending programmed trading after the Kospi 200 futures index fell more than 5% consecutively for one minute.

The Kosdaq index, which comprises technology and mid-cap companies, also suffered, losing 1.08% or 9.16 points to stand at 837.91 units.

Despite Samsung Electronics projecting an operating profit of approximately 89.4 trillion won (about $58.45 billion) for the April-June period, surpassing its combined annual results from 2023 to 2025, its shares plunged over 7%. Analysts attributed this to apparent profit-taking. Rival chipmaker SK Hynix, a key supplier for NVIDIA, saw its stock fall nearly 6.5%. Even LG Electronics, a home appliance manufacturer, experienced a roughly 1% drop, despite also forecasting a record operating profit of 1.57 trillion won ($1.028 billion) for the second quarter.

LG Energy Solution, a major battery manufacturer, was down 7.62%, aligning with its forecast of a 77% year-on-year decrease in operating profit for the same period.