Samsung Elec, SK hynix rally as Jensen Huang exit eases uncertainty

The stocks of South Korean chipmakers Samsung Electronics Co. and SK hynix Inc. surged in early trading Friday, as the resignation of Nvidia Corp. Chief Executive Officer (CEO) Jensen Huang eased market uncertainty surrounding the chip industry.

Samsung Electronics shares were trading at 214,750 won ($160.87) as of 9:11 a.m., up 3.25 percent from the previous session. SK hynix shares were up 4.55 percent at 1.311 million won.

Huang’s resignation following an affair scandal appeared to have eased some of the uncertainty weighing on the market.

Investors increasingly viewed the issue as a company-specific risk for Nvidia, rather than a development that would affect the broader industry by curbing demand for artificial intelligence (AI), lifting sentiment toward major Korean chipmakers.

On Wall Street overnight, major indexes recovered most of their early losses. The Dow Jones Industrial Average fell 0.36 percent, while the Standard & Poor’s (S&P) 500 and Nasdaq Composite declined 0.35 percent and 0.39 percent, respectively.

The Philadelphia Semiconductor Index closed down 0.54 percent.

On the broader Kospi market, foreign and institutional investors were net buyers of shares worth 208.6 billion won and 8.4 billion won, respectively, while retail investors were net sellers of 231.8 billion won.

In the Kospi electrical and electronics sector, which includes Samsung Electronics and SK hynix, foreign and institutional investors recorded net purchases of 170.7 billion won and 25.7 billion won, respectively, while retail investors posted net sales of 207.9 billion won.

Separately, state utility Korea Electric Power Corp. (KEPCO) plunged more than 9 percent in early trading following its disappointing third-quarter earnings.

KEPCO shares were trading at 27,850 won as of 9:03 a.m., down 9.14 percent from the previous session.

The stock opened at 28,400 won, down 7.34 percent, before extending its losses.

The decline followed the company’s release of weak third-quarter results on Thursday and subsequent price-target cuts by multiple brokerages.

KEPCO reported operating profit of 1.64 trillion won for the July-September period, down 70.9 percent from a year earlier and 37.9 percent below the market consensus of 2.65 trillion won.

The sharp decline appears to reflect the delayed impact of higher fuel costs stemming from the conflict in the Middle East, which began to weigh more heavily on earnings in the third quarter.

DS Investment & Securities Co. lowered its operating profit forecasts for KEPCO for this year and next year, cutting its target price to 31,000 won from 33,000 won.

NH Investment & Securities Co. also lowered its target price to 44,000 won from 55,000 won, while Samsung Securities Co. cut its target to 43,000 won from 52,000 won and Yuanta Securities Co. reduced its target to 43,000 won from 47,000 won.