South Korea's KOSPI index is experiencing significant volatility following news of advancements in DRAM technology by Chinese memory semiconductor company Changxin Memory Technologies (CXMT). Amid continued foreign selling, the index dropped more than 5%, prompting the activation of a sell-side circuit breaker for the first time in two months.
As of 10:03 a.m. on October 13, the KOSPI was down 335.88 points (5.26%) at 6048.34, according to the Korea Exchange.
At 9:47:58 a.m., the KOSPI 200 futures index fell, leading to a five-minute suspension of program selling orders in the securities market. At the time of the suspension, the KOSPI 200 futures index was 51.20 points (5.08%) lower than the previous day's close, at 955.02.
The sell-side circuit breaker in the securities market is triggered when the KOSPI 200 futures index remains down more than 5% for one minute. This is the first time a circuit breaker has been activated in the KOSPI market since August 20, and the first sell-side circuit breaker since August 19.
The decline in the KOSPI is attributed to the dampening of investor sentiment following reports of technological progress by CXMT, which plans to launch next-generation server products within the year based on its advancements in DRAM technology.
Overnight, the Philadelphia Semiconductor Index fell by 2.60%, and U.S. memory semiconductor company Micron Technology saw a 3.88% drop. SK Hynix's American Depositary Receipts (ADRs) also fell by 4.02%. Other major semiconductor companies, including NVIDIA (-1.29%), TSMC (-1.29%), and Broadcom (-1.88%), also experienced declines.
Large-cap semiconductor stocks are also seeing significant drops, with Samsung Electronics down 6.09%, SK Hynix down 8.10%, and SK Square down 10.26%. Foreign selling pressure is intensifying.
In the securities market, individuals and institutions are net buying 1.1178 trillion won and 367.3 billion won, respectively, while foreign investors are net selling 1.4969 trillion won.
Major stocks by market capitalization are all in the red, including Samsung Biologics (-0.83%), LG Energy Solution (-2.64%), and Samsung Electro-Mechanics (-7.40%).
At the same time, the KOSDAQ index recorded a drop of 23.33 points (2.72%) to 826.27. In the KOSDAQ market, individuals are net selling 179.2 billion won, while foreign investors and institutions are net buying 167 billion won and 20 billion won, respectively.
Most major stocks are also down in the KOSDAQ, including Alteogen (-3.24%), EcoPro BM (-5.80%), JUSUNG Engineering (-2.96%), Simtec (-4.13%), Wonik IPS (-2.37%), and EoTechnics (-3.42%).
Han Ji-young, a researcher at Kiwoom Securities, stated, "The recent weakening of individual investor sentiment, the end of Samsung Electronics' share buyback, and the foreign net selling have combined to weaken the supply-demand foundation of the domestic stock market. The end of share buybacks, which had previously acted as a buffer, has also contributed to the weakened supply-demand strength against selling pressure."
* This article has been translated by AI.
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