The KOSPI index, which had recently breached the historic 6,000-point milestone, crashed to record its worst single-day point drop and percentage decline simultaneously. Markets were gripped by fear, shocking individual investors who had been riding high on expectations. Yet amid the carnage, some retail investors moved to capitalize on the plunge as a buying opportunity.
On the 4th, the KOSPI closed at 5,093.54, down 698.37 points from the previous day. This far exceeded the previous record single-day drop of 452.22 points set just one day earlier. The 12.06% decline also marked the steepest percentage drop in approximately 25 years, surpassing the 12.02% fall on September 12, 2001.
Institutional investors led the selloff. They dumped 588.7 billion won worth of shares on the main bourse, intensifying the downturn. As sell orders flooded in, a sidecar trading halt was triggered early in the session. At approximately 11:17 a.m., circuit breakers were activated on both the KOSPI and KOSDAQ markets for the first time in 19 months.
Samsung Electronics and SK Hynix, the two heavyweights that had driven the KOSPI's rally, plummeted 11.74% and 9.58% respectively, freezing investor sentiment. All 50 companies in the top tier by market capitalization saw their shares decline.
Online investment forums descended into chaos. In Samsung Electronics discussion boards, investors posted reactions including "This is pure gambling" and "Korea's stock market fell harder than the actual parties in the U.S.-Iran conflict." Some vented their frustration at the volatility, writing "Even Venezuela's stock market would be more stable than this."
SK Hynix shareholders appeared equally stunned. Posts included "I lost the equivalent of a Grandeur sedan in two days" and "I'm too dumbfounded to even be angry." Others wrote "Outsiders would think we're at war with North Korea" and "I want to go back in time and cut off the finger that pressed the buy button."
Despite the panic, bargain hunters stepped in. While institutions net sold 588.7 billion won on the KOSPI, individual investors net purchased 79.7 billion won. Foreign investors also bought 237.6 billion won worth of shares.
Some retail investors are viewing the selloff as an opportunity. One investor said, "After two consecutive crashes, tomorrow will be a chance to scoop up bargains. I'll be picking up stocks during this rare fire sale. Samsung Electronics at 170,000 won is just where it was a month ago."
Analysts are cautioning against excessive fear. Han Ji-young, a researcher at Kiwoom Securities, said, "For the KOSPI to fall below 5,000, the earnings improvement outlook that has been driving the rally would need to be completely destroyed, and there are no signs of that yet." Han added, "A cumulative 19% plunge over two trading days is an irrational pace of decline, even accounting for index overheating risks and war risks."