Benchmark closes below 7,500 as foreigners sell over 5 trillion won Two photos taken at Hana Bank's dealing room in Seoul show the stark contrast in Friday's trading: the Kospi's historic break above 8,000 in the morning, left, and its steep slide from the peak to below the 7,500 threshold later in the day, right, underscoring the heightened volatility in the market. (Yonhap) The Kospi's first break above 8,000 lasted less than a day.Korea's benchmark stock index climbed to an intraday record Friday, only to tumble below 7,500 by the close as profit-taking swept through a market that had added 1,000 points in just seven trading days.The Kospi closed at 7,493.18, down 6.12 percent from the previous session and marking its lowest finish of the week.The reversal was sharp. After rising as high as 8,046.78 within the first half hour of trading, the index quickly fell back below its 7,951 opening level and kept sliding, touching 7,371.68.As the selloff deepened in the afternoon, the Korea Exchange triggered a sell-side sidecar around 1:28 p.m., the eighth this year, halting program sell orders for five minutes.From peak to trough, the Kospi lost 675.10 points, or about 8.4 percent.Foreign selling hits chip rallyFriday's selloff nearly erased the rally that followed the Kospi's first intraday breach of 7,000 on May 7.Diverging investor flows drove the volatility, with foreigners taking profits while retail investors bought the dip. Foreign investors sold a net 5.6 trillion won ($3.73 billion) on the Kospi, extending their selling streak to a seventh session. Retail investors bought a net 7.2 trillion won, aggressively absorbing the selloff, but institutions offloaded 1.74 trillion won, adding to pressure on the index.The foreign selling was concentrated in the country's two chip giants, Samsung Electronics and SK hynix, the same stocks that had powered the recent rally. Foreigners sold roughly 2.5 trillion won each of the two stocks Friday.As a result, Samsung Electronics closed down 8.6 percent at 275,000 won after falling more than 10 percent intraday, while SK hynix ended 7.7 percent lower at 1,819,000 won.Other large-cap stocks also suffered steep losses. SK Square, SK hynix's largest shareholder and the fourth-largest stock by market capitalization, fell 6.2 percent, while LG Energy Solution lost 5.7 percent and Doosan Enerbility dropped 5.4 percent.The sustained foreign selling also weighed on the won, pushing the dollar-won exchange rate above 1,500 for the first time in about a month. The rate opened at 1,494.2, passed 1,500 and closed weaker at 1,509.6.Not a fundamental breakAnalysts said Friday's rout looked less like a break in fundamentals than a sharp unwind of an overheated rally, as rising bond yields, a weaker won and renewed geopolitical risks gave investors a trigger to lock in gains after the Kospi's 1,000-point surge."The biggest issue is the speed of the index's rise," said Han Ji-young, an analyst at Kiwoom Securities. "The Kospi surged 20.9 percent from the start of May through Thursday," he said, adding that only semiconductors and autos outperformed the broader index during the run."The market appears to be using US rate concerns and war-related noise as a trigger for cooling," said Han.Lee Kyoung-min, an analyst at Daishin Securities, said the drop was unlikely to mark a turn into a downtrend, though the index may need more time to establish itself above 8,000."The pullback does not necessarily mark a trend reversal as earnings upgrades remain intact and valuations are still below forward price-to-earnings levels seen as excessive," he said, giving the 6,900-7,100 range as the first level to watch if selling pressure continues.Han also warned that volatility could persist. At current levels, daily swings of around 4 percent would not be surprising, he said, suggesting the market may remain prone to sharp moves in both directions next week.Even in the broader selloff, analysts noted pockets of rotation into robotics-linked names, suggesting investors were shifting toward fresh themes rather than exiting risk altogether after the chip-led rally overheated. LG Electronics jumped 10.8 percent, while LG Corp., the group's holding company, gained 7.7 percent. Further down the ranks, Doosan Robotics surged 19.3 percent.