Why Is the Korean Won Rising While Samsung and SK Hynix Fall?

South Korean won climbed to a two-year high against the dollar on Monday. However, shares of the chipmakers whose dollar sales help support the currency traded in the red.

The divergence emerged as Seoul’s markets reopened after a three-day holiday, with both the benchmark KOSPI and the tech-heavy KOSDAQ posting losses.

What Greeted Seoul’s Chip Giants After the Long Weekend

The benchmark KOSPI fell more than 3%, erasing about 162.7 trillion won in value, according to Bull Theory. The KOSDAQ fell more steeply, dropping 4.29% from its previous close to 853.98.

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Foreign investors drove much of Monday’s selling. They had offloaded a net 458 billion won in KOSPI shares by 9:55 a.m., according to the Asia Business Daily.

The sell-off was led by South Korea’s two leading chipmakers. SK Hynix shares fell 3.81% to 1.617 million won, while Samsung Electronics declined 3.63% to 252,500 won, according to Google Finance data.

Both stocks have also lost ground since October 7, with Samsung down 7.68% and SK Hynix shedding 7.23%. The declines extend a downturn that began before the holiday.

Samsung’s slide came despite the company’s preliminary third-quarter earnings announcement on October 8. It estimated a record operating profit of 107.4 trillion won.

Despite the recent pullback, both stocks remain sharply higher for the year. SK Hynix has gained 138.85% since January 1, while Samsung is up 96.5%.

The Seoul Economic Daily attributed the market weakness to escalating Middle East tensions and concerns that artificial intelligence (AI) stocks have become overheated.

Corporate support may also be fading. Samsung and SK Hynix are winding down share buybacks worth a combined 55 trillion won. 

Analysts have credited these repurchases with helping support the KOSPI, leaving the market with less buying pressure as investors turn cautious.

What Is Holding the Won at a Two-Year High

Meanwhile, the won strengthened as much as 0.8% from its previous close to 1,333.30 per dollar, Bloomberg reported. It later trimmed the gain to 0.5%.

Min Gyeong-won, an economist at Woori Bank in Seoul, tied the move to broader dollar weakness.

“The won is strengthening in line with broad dollar weakness as the euro, pound and yen all gain on lower oil prices,” Gyeong-won said.

Min added that exporters’ dollar sales, particularly from chipmakers, should keep supporting the won. Still, he noted that those flows were light on Monday.

Analysts have named Samsung and SK Hynix among the biggest sellers. In August, Edaily reported that the pair were steadily converting export dollars into the market.

The won has gained 7.7% since January on strong exports and corporate dollar selling. That took it from Asia’s worst performer in the first half to its best in the second half.

The split highlights how the same export-driven strength supporting the won has not prevented a sell-off in the companies behind it. 

Exporters’ dollar sales can boost demand for the won, while chip stocks remain vulnerable to foreign investor outflows, fading buyback support, and concerns over AI valuations.

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