The KOSPI and KOSDAQ indexes each fell more than 4% on Thursday, battered by Middle East war concerns and the TurboQuant shock. Foreign investors sold nearly 4 trillion won in a single session, bringing their monthly sell-off to 35 trillion won — a new all-time record for monthly net selling.
The KOSPI closed at 5,052.46 on March 31, down 224.8 points (4.26%) from the previous session, while the KOSDAQ ended at 1,052.39, down 54.66 points (4.94%), according to Korea Exchange (KRX).
Foreigners dumped 3.8473 trillion won on the main KOSPI market. Retail investors and institutional investors were net buyers of 2.4405 trillion won and 1.0248 trillion won, respectively. From March 3 through March 30, foreigners net sold a total of 31.9091 trillion won on the KOSPI market. With another massive sell-off on the last day of March, the figure surpassed the previous monthly record of 21.073 trillion won set in February.
Top KOSPI stocks by market capitalization fell across the board. The semiconductor duo of Samsung Electronics (005930.KS), down 5.16%, and SK hynix (000660.KS), down 7.56%, led the decline. LG Energy Solution (373220.KS) fell 3.78%, Hyundai Motor (005380.KS) dropped 5.11%, Samsung Biologics (207940.KS) slid 1.70%, Hanwha Aerospace (012450.KS) lost 4.51%, SK Square (402340.KS) tumbled 8.53%, Doosan Enerbility (034020.KS) shed 2.55%, and Kia (000270.KS) declined 4.16%.
U.S. markets opened higher on bargain hunting amid ceasefire negotiation hopes and views that the sell-off had been overdone. However, the S&P 500 closed down 25.13 points (0.39%) at 6,343.72, and the Nasdaq Composite fell 153.72 points (0.73%) to 20,794.64. The weakness on Wall Street was seen as exerting significant pressure on the Korean market.
The White House reiterated that negotiations between the United States and Iran continue to go well. U.S. President Trump also said major progress had been made in ceasefire talks with Iran's new regime. However, Trump warned that if a deal is not reached soon for any reason or the Strait of Hormuz is not immediately reopened, the U.S. would bomb Iran's power plants, oil fields, and Kharg Island, adding that desalination facilities could also be targeted. U.S. ground troops have also arrived in the Middle East in preparation for a potential breakdown in ceasefire talks.
A renewed TurboQuant shock that sent shares of Micron, the largest U.S. DRAM maker, plunging nearly 10% also dealt a direct blow to the market. Some analysts, however, view the TurboQuant shock as a short-term negative.
Park Yu-ak, a researcher at Kiwoom Securities, said of Google's TurboQuant and Nvidia's KVTC compression technology: "It is negative for server DRAM and enterprise solid-state drive (eSSD) demand outlook, but rather positive for HBM demand."
On the KOSDAQ, Samchundang Pharmaceutical hit the lower price limit. Ecopro (086520.KQ) fell 4.91%, Ecopro BM (247540.KQ) dropped 5.55%, Alteogen (196170.KQ) lost 3.67%, Rainbow Robotics (277810.KQ) declined 3.16%, ABL Bio (298380.KQ) slid 3.32%, and Kolon TissueGene (950160.KQ) tumbled 9.04%.
While the KOSDAQ index fell nearly 5%, the actual decline excluding Samchundang Pharmaceutical is estimated at around 2%. As of the previous session, Samchundang Pharmaceutical's market capitalization stood at 27.8 trillion won against the total KOSDAQ market cap of 613 trillion won. Factoring in the day's decline, the drag from Samchundang Pharmaceutical's drop is estimated at approximately 3%.
Han Ji-young, a researcher at Kiwoom Securities, said: "It would be appropriate to respond after confirming whether earnings consensus estimates are revised downward during the first-quarter earnings season, which will gauge business conditions in leading sectors such as semiconductors." Han added: "While this is a time when investors may consider reducing domestic equity exposure, maintaining existing equity positions is the realistic alternative."
