South Korean stocks tumbled to the 5,600 level at the open, falling back to lows last seen in late July, as the market ran into a double hazard of a U.S. inflation shock and debt risks tied to artificial intelligence infrastructure. Doubts over whether global big tech firms can recoup their capital spending combined with a Middle East-driven oil price shock, and support levels gave way with little resistance. If the market closes lower on the day, the KOSPI will post seven consecutive sessions of declines for the first time in about two years.
The KOSPI opened on the 15th at 5,668.07, down 340.74 points, or 5.67%, from the previous session. That is just above the close of 5,663.24 recorded on July 29. The KOSDAQ also opened at 783.08, down 40.80 points, or 4.95%. On the main board, foreign investors sold a net 284.7 billion won immediately after the open, marking an eighth straight session of net selling. Retail investors also sold a net 16 billion won. Institutions bought a net 296.6 billion won, but that was not enough to cushion the decline. A lower close on the day would give the KOSPI seven straight sessions of losses, the first such run in about two years and one month since Sept. 3-11, 2024. On the KOSDAQ, retail investors sold a net 37.1 billion won, while foreign investors and institutions were net buyers of 34.6 billion won and 4.7 billion won, respectively.
Top market-cap stocks were all struggling. Samsung Electronics (005930.KS), the market's biggest stock, traded at 220,000 won, down 5.17%, leaving it at risk of falling into the 210,000-won range, while SK hynix (000660.KS) slid 6.62% to the 1.325 million won level. The AI chip value chain fell across the board, including Samsung Electro-Mechanics (009150.KS), down 8.88%, SK Square (402340.KS), down 6.92%, Hanmi Semiconductor (042700.KS), down 8.23%, and Isu Petasys, down 8.63%. Power infrastructure stocks also could not escape the rout, with Hyosung Heavy Industries (298040.KS) down 10.54%, Sanil Electric down 10.05% and LS Electric down 7.11%.
The epicenter of the selloff was AI skepticism and a macroeconomic shock on Wall Street on the 14th. Gartner warned that $3.5 trillion of AI infrastructure investment will be exposed to the risk of asset impairment by 2030 and that more than 80% of neocloud operators will fail to become self-sustaining. CoreWeave, weighed down by the burden of high-yield debt, plunged 15.46%, while Nvidia fell 3.16%, Micron dropped 4.08% and SK hynix's American depositary receipts slid 6.06%. The U.S. consumer price index for September rose 3.7% from a year earlier, exceeding forecasts, and a surge in oil prices following Houthi attacks on Aramco facilities, with West Texas Intermediate at $95.1 a barrel, sent U.S. Treasury yields sharply higher and fueled fears of tighter policy.
Analysts said short-term correction pressure has reached an extreme as the yardstick for assessing the AI cycle shifts from the scale of capital spending to actual cash generation and profitability. Seo Sang-young, managing director at Mirae Asset Securities (006800.KS), said losses widened as the market reflected the sharp drop in U.S. stocks, and that the key question is whether technical bargain hunting emerges after the excessive decline. "TSMC earnings due later in the session will be the turning point that determines further volatility," Seo said.
