The KOSPI tumbled about 1,000 points in five sessions, breaking below the psychologically important 6,000 level during intraday trading. Skepticism over artificial intelligence investment and China's advance in memory chips combined to drive the decline, but the drop remains far steeper than those in other global markets. Foreign investors have dumped Samsung Electronics (005930.KS) shares day after day even after the company reported record earnings, pushing investor fatigue to its limit and leaving analysts reluctant to predict a rebound.
The KOSPI closed at 6,035.35 on the 13th, down 5.46% from the previous session, according to the Korea Exchange. It fell as low as 5,911.11 during the session, dropping below 6,000 for the first time since July 31. The index sank to levels seen during the July-August selloff even though single-stock leveraged exchange-traded funds have effectively disappeared. The plunge triggered a sell-side sidecar, the first in 35 trading sessions since Aug. 19.
Brokerages attributed the selloff to concerns about a capital bottleneck across the AI industry and intensifying technology competition. The unveiling of next-generation DRAM memory technology by China's ChangXin Memory Technologies (CXMT) weighed on sentiment. Samsung Electronics fell 7.39% and SK hynix (000660.KS) dropped 10.09%, returning to the 230,000-won and 1.4 million-won ranges.
The KOSPI had closed at 7,003.74 on the 2nd, raising hopes for a rebound, but has since fallen for five consecutive sessions, giving up 968.39 points. Market capitalization shrank by 794 trillion won over that period to 4,979 trillion won, falling below 5,000 trillion won for the first time since July 30. Foreign investors sold a net 4.52 trillion won (about $3.4 billion) worth of shares on the 13th alone. Their net selling totals 8.57 trillion won this month and has surpassed 200 trillion won for the year. The won weakened 10.0 won against the dollar to 1,345.1 on the foreign selling.
The concern is that Korean stocks prove less resilient than other markets whenever a shock hits. Japan's Nikkei 225 fell 1.82% and Taiwan's Taiex dropped 1.95% on the same day, while Hong Kong's Hang Seng Index rose 0.3% and China's Shanghai Composite gained 0.1%. "A short-term rebound is possible if foreign selling settles down and earnings forecasts hold, but a sustained uptrend requires a broad improvement in supply and demand," said Lee Jong-hyung, head of the research center at Kiwoom Securities (039490.KS).