The KOSPI index has dropped more than 3% in early trading due to concerns over a potential interest rate hike by the U.S. Federal Reserve in September and weakness in semiconductor stocks. Foreign and institutional investors are selling off shares, with Samsung Electronics and SK Hynix contributing to the decline.
As of 9:09 a.m. on August 31, the KOSPI was down 225.56 points (3.32%) at 6,563.32, according to the Korea Exchange.
In the main stock market, foreign and institutional investors have sold a net 177.1 billion won and 65.6 billion won, respectively. In contrast, individual investors have purchased a net 217.4 billion won.
Among the top market capitalization stocks, semiconductor shares are particularly weak. Samsung Electronics is trading at 247,000 won, down 3.89% from the previous trading day, while SK Hynix has fallen 3.93% to 1,588,000 won. Both stocks had also seen declines of 3.38% and 4.45%, respectively, on August 28. Other companies such as Doosan Enerbility, Hyundai Motor, Naver, and LG Electronics are also experiencing losses, while Samsung SDI is showing an upward trend.
The KOSDAQ index has also dropped over 3%, with the index down 30.63 points (3.65%) at 807.78 at the same time. In the KOSDAQ market, individual investors have purchased a net 64.1 billion won, while foreign and institutional investors have sold a net 46.9 billion won and 16.5 billion won, respectively.
The weakness in the domestic stock market is attributed to concerns over interest rate hikes that emerged from the U.S. market last weekend, along with the sharp decline in semiconductor stocks. Following hawkish comments from Federal Reserve Chair Kevin Warsh at the Jackson Hole meeting, the likelihood of a rate hike in September has increased, dampening investor sentiment. On August 28, the Philadelphia Semiconductor Index fell by 3.47%, and major semiconductor stocks like Nvidia also showed weakness.
However, analysts believe that the impact of the Jackson Hole meeting results is not beyond what the market can handle. They anticipate that upcoming U.S. economic indicators and the recovery of supply and demand for domestic semiconductor stocks will determine the direction of the stock market.
Han Ji-young, a researcher at Kiwoom Securities, stated, "Chairman Warsh's remarks primarily emphasize the dual mandate of the Fed regarding price stability and full employment. It is appropriate to continue to prioritize the importance of inflation and employment indicators as before." He added, "The recent weakness in semiconductor stocks is not due to fundamental damage but stems from heightened expectations and supply-demand issues. Following confirmation of strong exports in August, market attention is expected to focus on changes in semiconductor stock prices and supply-demand dynamics."
* This article has been translated by AI.
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