Doubts about the profitability of artificial intelligence infrastructure and renewed U.S. inflation fears have hit South Korean stocks at the same time, sending the KOSPI down for a seventh consecutive session without a single day of respite. Goldman Sachs described the selloff as an unusual multi-day rout comparable to past global financial shocks, saying the pattern resembles the early stage of the COVID-19 pandemic and the 2011 U.S. credit rating downgrade.
The KOSPI widened its intraday loss to more than 7% on the 15th, slipping below the 5,570 level. A close in negative territory would mark the index's longest losing streak since September 2024 at seven sessions. In a report, Goldman Sachs projected the KOSPI would extend its decline to a seventh straight session, calling the peak-to-trough drop in the current downturn far more severe than a typical seven-session correction. Over the past 20 years, the bank said, only two episodes saw selling of this magnitude without a technical rebound: the early pandemic in March 2020, with a 20.5% drop, and the U.S. credit rating downgrade in August 2011, with a 15.1% decline.
According to the Korea Exchange, the KOSPI closed at 7,003.74 on the 2nd before falling to as low as 5,579.04 intraday on the 15th. Measured against the intraday high of 7,044.67 on Oct. 6, the peak-to-trough decline reaches 20.80%, exceeding the shock seen during the pandemic. As of 10:07 a.m., only 90 stocks were advancing while 816 were declining, showing the selloff had spread across the broader market. Samsung Electronics (005930), the market's largest company by value, plunged more than 8% to the low 210,000-won range, while SK hynix (000660) tumbled more than 10% to trade around 1.27 million won.
Liquidity on the main board has also dried up. Foreign investors have been net sellers for eight consecutive sessions from the 2nd through the 15th. They sold a net 1.5 trillion won or more on the morning of the 15th alone, bringing cumulative net sales over the eight sessions to 15.7 trillion won.
Behind the panic selling lie skepticism about global AI capital spending and macroeconomic uncertainty. Research firm Gartner warned that $3.5 trillion of AI infrastructure investment will be exposed to asset impairment risk through 2030, and borrowing risks came into focus as the yield on maturing bonds of AI cloud provider CoreWeave approached 15%. The U.S. consumer price index rose 3.7% in September, fueling fears of tighter monetary policy, while a Houthi attack on Saudi Aramco facilities drove oil prices higher, with West Texas Intermediate crude at $95.10 a barrel. Analysts said the KOSPI has entered extremely oversold territory but expect a precarious tug-of-war over supply and demand until TSMC's earnings are released later in the session.
