Leading stocks that had surged on the back of artificial intelligence (AI) infrastructure expansion — including semiconductor substrates, multi-layer ceramic capacitors (MLCC), and power infrastructure — turned weak across the board on Tuesday, dragging down the Korean stock market. With profit-taking pressure from a short-term rally compounding concerns over interest rate hikes and supply disruptions from major global initial public offerings (IPOs), the KOSPI fell below the 8,600 level, while the KOSDAQ slid for a fourth consecutive session, threatening its hold on the 1,000 mark.
As of 10:55 a.m. on the 2nd, the KOSPI was down 190.95 points, or 2.17%, at 8,597.43. The early-session enthusiasm that had driven the index to a record high above 8,900 evaporated, with support levels collapsing. At the same time, the KOSDAQ was down 34.96 points, or 3.33%, at 1,015.07, putting the 1,000 line at risk.
At the center of the decline were large-cap stocks tied to high-performance substrates and MLCCs, which had been spotlighted as AI beneficiaries. On the main board, Samsung Electro-Mechanics (009150.KS) traded at 1.727 million won, down 13.87% from the previous session, while LG Innotek (011070.KS) retreated 21.37% to 1.203 million won. Both stocks had attracted buying on expectations of explosive demand for high-value-added products such as multi-layer boards (MLB) and next-generation semiconductor package substrates (FC-BGA), but neither could escape sharp losses on the day.
Leading stocks in the power and nuclear infrastructure themes also slumped together. LS ELECTRIC traded at 241,500 won, down 9.55%, while HD Hyundai Electric fell 6.75%, Hyosung Heavy Industries 6.61%, and Doosan Enerbility 6.31%. Samsung Electronics (005930.KS), the market bellwether, was up 1.15% at 353,000 won, though its gains were narrowing, while SK hynix (000660.KS) was down more than 3%.
On the supply-and-demand front, foreign investors were intensifying the downward pressure during the session. As of that time, foreigners had net sold 3.5271 trillion won worth of shares on the main board alone, dumping a massive volume. Retail investors absorbed the supply by buying 3.6889 trillion won worth of shares, but it was not enough to defend against the avalanche of selling.
Securities analysts diagnose that fatigue from the short-term surge, combined with macroeconomic variables and an election scheduled for the 3rd, is amplifying downward pressure. "With news of SpaceX's listing this month and Anthropic also pursuing an IPO, global capital is moving out on the supply-demand side," said Kim Dae-joon, research fellow at Korea Investment & Securities. "After the market surged in a short period on expectations of Jensen Huang's visit to Korea, this is the result of strong profit-taking demand to clear portfolios ahead of the election."
Concerns over the materialization of interest rate hikes — following the Bank of Korea governor's hawkish remarks the previous day and the confirmation of consumer price inflation figures — are also weighing on the market. "The peak-level burden that had built up as the market rose without rest erupted in a wave of selling near the psychological resistance line of 9,000," said Lee Young-gon, head of the research center at Toss Securities. "Given that the market had been extremely concentrated in a handful of large caps, when these leading stocks waver, the ripple effect on the entire market becomes even greater."
