The South Korean stock market opened sharply lower, dropping over 4% due to a correction in U.S. tech stocks and significant foreign selling. The early trading session saw the activation of a sell-side circuit breaker, indicating a marked decline in investor sentiment.
As of 9:04 a.m. KST, the KOSPI index was down 355.50 points (-4.11%) at 8,283.91. The index opened at 8,323.20, down 316.21 points (-3.66%), before extending its losses.
At 9:08:25 a.m., a sell-side circuit breaker was triggered due to a sharp drop in the KOSPI 200 futures index, pausing program sell orders for five minutes. This circuit breaker activates when the KOSPI 200 futures index falls more than 5% for one minute.
In the U.S. markets overnight, the three major indices closed mixed. The Dow Jones Industrial Average and the S&P 500 rose by 1.73% and 0.41%, respectively, while the tech-heavy Nasdaq Composite fell by 0.09%.
Notably, Broadcom saw a significant drop of 12.59%, while other memory-related stocks like Micron Technology (-7.74%), SanDisk (-3.92%), and Western Digital (-3.13%) also experienced declines.
Market analysts suggest that this correction is more about profit-taking than a deterioration in fundamentals. Han Ji-young, a researcher at Kiwoom Securities, stated, "The adjustment in leading stocks is not due to worsening fundamentals or macroeconomic issues, such as an impending memory down cycle or increased discount rate pressure from rising interest rates. Rather, it appears to be a temporary surge of investors looking to realize profits following consecutive record highs, leading to a brief influx of selling after specific events."
In terms of market supply and demand, foreign investors are engaging in large-scale net selling. In the securities market, individual and institutional investors have net bought 447.2 billion won and 75.7 billion won, respectively, while foreign investors have net sold 550.8 billion won.
Most of the top market capitalization stocks are also in decline. Samsung Electronics (-5.97%), SK Hynix (-7.57%), SK Square (-9.04%), Hyundai Motor (-4.00%), Samsung Electro-Mechanics (-3.85%), LG Energy Solution (-1.66%), Samsung Life Insurance (-6.74%), and Samsung C&T (-12.34%) are all experiencing losses, with only HD Hyundai Heavy Industries showing an increase of 3.53%.
The KOSDAQ index is also down. At the same time, the KOSDAQ index recorded a decline of 25.27 points (2.41%) to 1,024.46. The index opened at 1,035.22, down 14.51 points (1.38%), and continued to widen its losses.
In the KOSDAQ market, individuals have net bought 28.8 billion won, while foreign and institutional investors have net sold 27.2 billion won and 1.8 billion won, respectively.
Most of the top KOSDAQ stocks are also declining. EcoPro BM (-4.00%), Alteogen (-0.43%), EcoPro (-3.96%), Rainbow Robotics (-4.62%), Juseong Engineering (-10.53%), Kolon TissueGene (-0.18%), Rino Industry (-2.71%), Samchundang Pharmaceutical (-2.42%), HLB (-0.57%), and Peptron (-0.19%) are all showing downward trends.
Meanwhile, analysts suggest that the upcoming visit of Jensen Huang, CEO of NVIDIA, and discussions on collaboration with domestic companies could impact related stocks.
Seo Sang-young, a researcher at Mirae Asset Securities, noted, "While there are still concerns about the dollar/won exchange rate and ongoing foreign selling, the CEO's visit and expectations for collaboration with major companies could lead to concentrated interest in specific stocks rather than overall market indices."
* This article has been translated by AI.
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