The KOSPI index dropped nearly 4% as pessimism surrounding global artificial intelligence (AI) semiconductors spread. Despite hopes for a rebound after three consecutive trading days of gains, fueled by stabilizing interest rates, international oil prices, and exchange rates, concerns about the sustainability of AI investments proved too significant to overcome.
On October 20, the KOSPI closed at 5,552.74, down 215.27 points (-3.73%) from the previous trading day. During the session, it fell to as low as 5,493.24 before recovering slightly in the afternoon. The KOSDAQ also ended lower, closing at 781.97, down 26.92 points (-3.33%).
In the securities market, foreign and institutional investors sold a net 530 billion won and 1.048 trillion won, respectively, while individual investors purchased a net 898.1 billion won. In the KOSDAQ market, individual investors bought a net 294.2 billion won, while foreign and institutional investors sold a net 183.8 billion won and 110.6 billion won, respectively.
Among the top market capitalization stocks, declines were led by semiconductor companies. Samsung Electronics closed at 211,500 won, down 2.98%, while SK Hynix fell 4.23% to 1,223,000 won. Notably, SK Hynix saw a drop of 7.36% early in the session, dipping below 1.2 million won.
Stocks in the secondary battery sector, which had rebounded the previous day on expectations for expanded AI data center infrastructure, also experienced significant declines. Samsung SDI closed at 556,000 won, down 6.08%, erasing all of its prior gains. Other major companies, including LG Energy Solution (-4.17%), SK Innovation (-9.14%), and POSCO Holdings (-3.97%), also fell.
Market analysts predict that recovery in investment sentiment will be challenging unless doubts about the future performance and profitability of semiconductor companies are fully resolved. Han Ji-young, a researcher at Kiwoom Securities, stated, "The KOSPI is experiencing excessive declines due to a combination of factors, including ongoing uncertainties in the AI investment cycle following the collapse of CoreWeave's corporate bonds, technological competition in Chinese memory, concerns over reduced investments by U.S. big tech companies, and fears of deteriorating fourth-quarter earnings for export companies due to declining exchange rates. The continued decline in stock prices, despite already being in oversold territory, reflects the worsening investment sentiment."
Lee Kyung-min, a researcher at Daishin Securities, noted, "Unless concerns regarding credit and profitability surrounding AI are completely alleviated, the sustainability of any rebound will be limited. Ongoing cost pressures, international oil price burdens, and rising bond yields are also contributing to downward pressure on the stock market."
* This article has been translated by AI.
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