KOSPI Drops Over 4%, SK Hynix and Kioxia Plunge 10% as Japan, South Korea Stocks Retreat

TradingKey - On August 6, Japanese and South Korean stocks closed lower, with SK Hynix closing down 10%, Samsung Electronics falling 6%, and Kioxia dropping more than 10%.

At the close, the South Korea Composite Stock Price Index (KOSPI) fell 302.82 points, or 4.59%, to 6,295.44; the South Korean KOSDAQ index bucked the trend to rise slightly by 0.26%. Japan's Nikkei 225 Index fell 617.18 points, or 0.93%, to close at 65,683.26.

Source: TradingView

The semiconductor and memory chip sector continued to be the main drag on the market. SK Hynix plunged 10.37% to close at 1,495,000 won (approx. $1,049). Samsung Electronics fell 6.30% to close at 230,500 won, as the weakness in both stocks continued to drag on the KOSPI.

Japanese tech stocks were also under pressure, with memory chipmaker Kioxia slumping 10.24% to close at 48,740 yen (about $309). SoftBank Group closed down 4.41% at 5,695 yen. Notably, SoftBank Group reported a net profit of 347.33 billion yen for its first fiscal quarter, far exceeding the market estimate of 165.83 billion yen.

The overnight weakness in the US memory chip sector further dampened sentiment in Asian markets. SanDisk ( SNDK) and Western Digital ( WDC) fell about 8% and 12% respectively in after-hours trading after releasing their latest earnings reports, triggering a market reassessment of the memory industry's cycle and earnings outlook, and putting pressure on related Asian stocks.

Bloomberg MLIV strategist Mark Cranfield noted that the current pullback in Asian markets has not yet devolved into a full-blown risk-off event. He pointed out that US stock index futures remained relatively stable, suggesting that Wall Street's Thursday opening would still have some support.

However, the sharp stock price fluctuations triggered by SanDisk and Western Digital's earnings also underscore that valuations in the semiconductor sector remain highly sensitive, where any performance slightly below market expectations could trigger a rapid capital flight.