Korea's stock market was rattled once again as a slump in US chip stocks combined with geopolitical risks in the Middle East. The KOSPI and KOSDAQ both plunged more than 5%, and a flood of program selling triggered sell-side sidecars on both markets for a second consecutive day.
The KOSPI closed at 7,246.79 on Wednesday, down 409.52 points, or 5.35%, from the previous trading day, according to the Korea Exchange. The index opened at 7,452.48, down 203.83 points, or 2.66%, then fell to the 7,350 level during the session before briefly turning positive on bargain-hunting demand. But selling pressure strengthened again in the afternoon, ultimately pushing the index down to the 7,200 level.
The KOSDAQ also closed at 785.00, down 46.23 points, or 5.56%. The index opened at 816.39 and fell to 778.70 during the session, dropping below the 800 level for the first time in about 10 months since last September.
Foreign investors net bought 331.2 billion won on the KOSPI and 336.9 billion won on the KOSDAQ, while institutions net sold 337.7 billion won on the KOSPI and 145.2 billion won on the KOSDAQ. Individuals also sold 45.1 billion won worth on the KOSPI and 192.7 billion won worth on the KOSDAQ.
Volatility widened during the session, triggering sidecars in succession. At 1:31 p.m. on the securities market, KOSPI200 futures fell more than 5% below the reference price for over one minute, suspending the effect of program sell orders for five minutes. Then at 1:33 p.m., KOSDAQ150 futures and the spot index also met the trigger conditions, activating a sell-side sidecar on the KOSDAQ market as well.
Most top market-cap stocks also fell sharply. Samsung Electronics (005930.KS), the world's largest memory chipmaker, closed at 277,500 won, down 6.25%, dropping below the 280,000 won level, while SK hynix (000660.KS) closed at 2.076 million won, down 5.68%. Samsung Electro-Mechanics (-10.25%), Samsung Life Insurance (-7.73%), Samsung C&T (-6.95%), SK Square (-6.34%), LG Energy Solution (-4.97%), Samsung Biologics (-4.15%), and Hyundai Motor (-3.55%) all showed weakness.
Selling also spread across growth stocks on the KOSDAQ. ABL Bio (-13.21%), Jusung Engineering (-8.88%), Wonik IPS (-8.87%), Kolon TissueGene (-7.84%), Ecopro (-7.58%), Alteogen (-7.11%), Rainbow Robotics (-6.75%), and Ecopro BM (-6.32%) fell sharply.
In the US market overnight, concerns spread across the semiconductor sector following Samsung Electronics' earnings announcement, sending the Philadelphia Semiconductor Index down more than 4%. In addition, geopolitical tensions surrounding the Strait of Hormuz drove up international oil prices, further strengthening risk-off sentiment.
"As US semiconductor sector weakness and Hormuz risk overlapped, domestic market investor sentiment contracted significantly, centered on chips," said Kang Jin-hyuk, a researcher at Shinhan Investment Securities. "For a rebound, additional momentum confirming expanded global AI investment is needed."
