The South Korean stock market opened lower on October 23, influenced by a sharp decline in U.S. tech stocks and rising international oil prices. Both the KOSPI and KOSDAQ indices showed weakness, with attention on whether bargain hunting following the previous day's drop and news of SK Hynix halting its Solidigm IPO review could limit losses during the trading session.
According to the Korea Exchange, as of 9:06 a.m., the KOSPI was down 164.31 points (2.97%) at 5,369.46. The index started at 5,403.17, down 130.60 points (2.36%) from the previous trading day, before extending its losses.
In the securities market, individuals and institutions were net buyers, purchasing 53.7 billion won and 96.1 billion won, respectively. In contrast, foreign investors sold a net 147.4 billion won, applying downward pressure on the index.
Most large-cap stocks were also in decline. Samsung Electronics fell 2.56%, SK Hynix dropped 0.90%, SK Square decreased by 0.53%, LG Energy Solution was down 1.15%, Samsung Electro-Mechanics fell 4.10%, Hyundai Motor declined 2.49%, KB Financial dropped 1.58%, and Samsung Life Insurance decreased by 1.86%. However, Samsung Biologics rose by 2.72%.
The KOSDAQ index also widened its losses, trading at 737.94, down 26.16 points (3.42%) from the previous day. It started at 748.32, down 15.78 points (2.07%).
In the KOSDAQ market, individuals and institutions were net sellers, offloading 31.2 billion won and 7.3 billion won, respectively, while foreign investors were net buyers, purchasing 40.9 billion won.
All major stocks in the KOSDAQ were on a downward trend. Alteogen fell 1.30%, EcoPro dropped 4.92%, EcoPro BM decreased by 5.60%, Juseong Engineering fell 5.84%, Rainbow Robotics dropped 4.79%, HLB decreased by 1.45%, EoTechnics fell 4.39%, Samchundang Pharmaceutical dropped 0.40%, Rino Technology decreased by 5.61%, and Wonik IPS fell by 5.70%.
The weakness in the domestic stock market is attributed to the decline in U.S. tech stocks overnight. On October 22 (local time), the three major U.S. indices closed mixed. The Dow Jones Industrial Average rose by 0.02%, while the S&P 500 and Nasdaq Composite fell by 1.21% and 2.60%, respectively, with the Nasdaq recording its largest drop since June.
The semiconductor sector was particularly weak, with the Philadelphia Semiconductor Index plummeting by 6.72%. Micron fell by 6.26%, NVIDIA dropped by 4.40%, and Intel decreased by 8.04%. Additionally, SK Hynix's American Depositary Receipts (ADRs) and SanDisk fell by 8.07% and 8.51%, respectively.
Concerns over the profitability of AI investments have pressured tech stocks overall. Meta reported a negative free cash flow for the third quarter, and Tesla lowered its capital expenditure outlook, raising caution about investment burdens. Even with solid corporate performance and demand for AI, doubts have resurfaced regarding the ability to secure profitability and cash flow amid substantial investment costs.
Moreover, rising international oil prices due to heightened geopolitical tensions in the Middle East have dampened risk appetite among investors. Brent crude futures traded at $113.17 per barrel, up 4.00% from the previous day, while West Texas Intermediate (WTI) for December delivery rose by 2.39%. Concerns about oil supply disruptions increased after Yemen's Iran-aligned Houthi rebels announced further attacks on key facilities in Saudi Arabia.
However, there is potential for some recovery during the trading session. Han Ji-young, a researcher at Kiwoom Securities, stated, "The domestic market is expected to open lower due to concerns over credit risks related to Meta and the burden of rising oil prices. However, the negative impact from Meta may have already been priced in during the previous day's trading, and the perception of overselling remains valid. Therefore, we may see a recovery in losses as the market absorbs early selling pressure."
Additionally, a factor influencing semiconductor investment sentiment emerged. SK Hynix announced that it has decided to halt its review of the Solidigm IPO, stating, "We have been considering various funding options to expand production capacity and enhance competitiveness, but have decided to suspend the review of the pre-IPO and IPO considering the overall capital market conditions." A researcher noted, "The announcement regarding SK Hynix's suspension of the Solidigm IPO review is likely to contribute positively to semiconductor investment sentiment."
* This article has been translated by AI.
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