South Korea's KOSPI tumbled more than 2% in early trading on Oct. 20, falling below the 5,700 level, even after semiconductor stocks rebounded across the board on U.S. markets overnight. With concerns over the profitability of the artificial intelligence industry still unresolved, a two-day rally has broken off and investor sentiment in the domestic market has yet to recover.
As of 9:12 a.m., the KOSPI was trading at 5,647.04, down 120.97 points, or 2.10%, from the previous session, according to the Korea Exchange. The index opened at 5,733.57, down 34.44 points or 0.58%, then widened its losses and gave up the 5,700 level. The KOSPI had risen for two consecutive sessions to close at 5,768.01 the previous day before turning lower again.
By investor type, retail investors were the sole net buyers at 220.5 billion won, while foreign and institutional investors dragged the index down with combined selling. Foreign investors sold 112.7 billion won worth of shares and institutions sold 142.9 billion won.
Most of the largest stocks by market capitalization were also weaker. Samsung Electronics was trading at 215,250 won, down 1.26% from the previous session, while SK hynix slid 4.23% to 1.223 million won. Samsung Electronics preferred shares (-0.94%), LG Energy Solution (-1.85%), SK Square (-3.97%), Samsung Electro-Mechanics (-2.91%), Hyundai Motor (-1.84%) and Samsung SDI (-2.28%) all declined.
The moves contrast with New York, where chip stocks rebounded overnight on bargain hunting. The Nasdaq Composite rose 1.11% on the 19th, and the Philadelphia Semiconductor Index gained 1.61% for its first advance in nine sessions. Micron rose 3.0% and Nvidia gained 1.4%, but AI infrastructure company CoreWeave failed to hold intraday gains and closed down 0.4%, as caution persisted over the profitability and credit risk of AI-related firms. Rising international oil prices and the burden of global interest rates were also cited as factors constraining a market rebound.
Han Ji-young, an analyst at Kiwoom Securities, said upside factors such as the Nasdaq's successful rebound and technical buying driven by a continued sense that the market is oversold coexist with downside factors including political uncertainty stemming from Europe and caution ahead of U.S. big tech earnings. "The overall ceiling for the market will remain limited while sectors diverge," the analyst said.
At the same time, the KOSDAQ was at 794.82, down 14.07 points or 1.74% from the previous session. The index opened at 805.37, down 3.52 points or 0.44%, then deepened its losses and fell below the 800 level. Top KOSDAQ stocks by market value all declined, including Alteogen (-1.88%), EcoPro (-3.87%), EcoPro BM (-4.84%), Rainbow Robotics (-2.78%) and HLB (-1.98%).
