KOSPI Plunges for Second Day Amid Panic Selling

Shockwaves from U.S. airstrikes on Iran continued to hammer South Korean markets for a second consecutive day, with the KOSPI and KOSDAQ indices plummeting as much as 6% during intraday trading. Even semiconductor blue-chips that had led the domestic market rally failed to escape the downturn.

As of 10 a.m. on the 4th, the KOSPI was down 3.66% from the previous session. Sharp declines in the two largest semiconductor companies by market capitalization weighed heavily on the index. Samsung Electronics fell 2.67% while SK Hynix dropped 0.7% from the previous trading day. Foreign and retail investors sold aggressively across the KOSPI, offloading 385.6 billion won and 17.6 billion won respectively by 10 a.m.

Samsung Electronics opened at 184,200 won, down 5.59% from the previous session, and briefly extended losses to 7.94%, falling to 179,600 won. Some bargain hunters stepped in during the session to narrow the decline, but investor sentiment remains frozen. SK Hynix also dropped to as low as 842,000 won in pre-market trading. Both stocks had already crashed approximately 10% the previous day, with Samsung falling from the "200,000 won Samsung" level to "190,000 won Samsung" and SK Hynix dropping from "1 million won Hynix" to "900,000 won Hynix."

Other market-cap leaders outside semiconductors also flashed red across the board. Hyundai Motor fell 5%, while Kia (-5%), LG Energy Solution (-3%), Samsung Biologics (-4%), SK Square (-6%), and HD Hyundai Heavy Industries (-7%) declined regardless of sector.

Defense stocks, which had been expected to benefit from escalating Middle East geopolitical tensions, showed extreme volatility. Hanwha Aerospace, a leading defense stock, surged more than 10% in pre-market trading but reversed course as selling pressure mounted after the regular session opened, currently trading down 7%. Compared to the pre-market high, the stock has fallen nearly 20% in just over an hour.

However, analysts maintain that semiconductor fundamentals remain intact despite external uncertainties surrounding the market. Kiwoom Securities analyst Park Yu-ak raised target prices for Samsung Electronics and SK Hynix to 260,000 won and 1.3 million won respectively in a report released the same day. "The sharp rise in memory prices we have discussed since last fall is entering its final stage," Park said. "We expect to enter a cycle of expanded capital expenditure and increased shipments based on improved profitability."