The KOSPI index continued its decline on October 30, dropping over 3% due to a significant sell-off by foreign investors and the impact of falling U.S. tech stocks. Investor sentiment has sharply weakened, prompting the activation of a sell-side circuit breaker.
According to the Korea Exchange, as of 1:20 PM, the KOSPI index was down 205.48 points (3.46%) at 5,732.18 compared to the previous trading day.
In the securities market, foreign investors led the decline with a net sell of 1.1274 trillion won. In contrast, individual investors purchased a net 937 billion won, while institutional investors bought a net 3.8 billion won.
The sell-side circuit breaker was triggered due to the KOSPI 200 futures price falling more than 5% from the previous day's close for over one minute, temporarily halting the effectiveness of program sell orders for five minutes.
Most of the top market capitalization stocks are experiencing losses. Samsung Electronics traded at 224,500 won, down 3.23%, while SK Hynix fell 5.96% to 1,435,000 won.
Other declining stocks include Samsung Electronics preferred shares (-4.51%), SK Square (-4.25%), Samsung Electro-Mechanics (-8.35%), Hyundai Motor (-3.08%), KB Financial (-1.34%), and Samsung Life (-2.88%). Conversely, Samsung Biologics (5.42%) and LG Energy Solution (0.42%) saw gains.
The KOSDAQ index also fell, showing a decrease of 25.61 points (3.40%) to 727.62 at the same time.
In the KOSDAQ market, individual investors net bought 170.5 billion won, while foreign and institutional investors sold a net 65.5 billion won and 98.4 billion won, respectively.
Among the top market capitalization stocks, Alteogen (-2.05%), EcoPro (-1.43%), EcoPro BM (-1.52%), Juseong Engineering (-4.18%), and Rainbow Robotics (-3.44%) declined. Notably, semiconductor-related stocks such as Simtek (-8.27%), Rino Industrial (-7.78%), and Wonik IPS (-6.47%) experienced significant drops.
The weakness in the domestic stock market is attributed to renewed concerns over the profitability of U.S. AI investments. Overnight, Alphabet's stock plummeted over 12% due to disappointing earnings and worries about cash flow deterioration from large capital expenditures. The tech-heavy Nasdaq index fell 1.38%, while the Philadelphia Semiconductor Index dropped 1.42%.
Amazon also reported third-quarter revenue and earnings per share below market expectations, particularly highlighting a $42.4 billion deficit in free cash flow, raising concerns about the burden of AI investments. However, Amazon Web Services (AWS) revenue increased by 39% year-over-year, indicating robust demand for AI infrastructure.
Lee Kyung-min, a researcher at Daishin Securities, noted in a report on major global issues that while Alphabet's cloud revenue grew by 103% year-over-year, the significant AI investments have led to an expanded deficit in free cash flow.
Alphabet's capital expenditures for the third quarter surged 114% year-over-year to $51.355 billion, with free cash flow showing a deficit of $9.065 billion, worsening from the previous quarter. Analysts suggest that despite revenue growth related to AI, rising investment costs are putting pressure on corporate profitability.
* This article has been translated by AI.
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