The KOSPI index dropped over 1% in early trading, falling below the 6740 mark due to foreign selling. Concerns over AI demand and weak semiconductor stocks in the U.S. market during the holiday period have also impacted major domestic semiconductor companies like Samsung Electronics and SK Hynix, which are experiencing declines.
As of 9:09 a.m. on July 20, the KOSPI was down 75.34 points (1.10%) at 6745.26 compared to the previous trading day.
In the securities market, foreign investors have net sold 27.3 billion won. Meanwhile, individual and institutional investors have net bought 9.7 billion won and 12.7 billion won, respectively.
Among the top market capitalization stocks, semiconductor giants are struggling. Samsung Electronics is trading at 252,000 won, down 3,000 won (1.18%) from the previous day. SK Hynix has also fallen by 11,000 won (0.60%) to 1,831,000 won. Additionally, Hanwha Ocean is down 3,650 won (4.21%) at 83,050 won, while Hyundai Motor has decreased by 18,000 won (4.24%) to 407,000 won.
At the same time, the KOSDAQ index is trading at 783.69, down 8.15 points (1.03%) from the previous day. In the KOSDAQ market, individual investors have net sold 4.4 billion won, while foreign and institutional investors have net bought 3.3 billion won and 1.7 billion won, respectively.
The domestic stock market is believed to be influenced by the weak performance of U.S. stocks and global semiconductor stocks during the holiday period. From July 15 to 16, while the domestic market was closed, U.S. stocks faced pressure from concerns over AI demand, intensified competition with Chinese AI companies, and uncertainties surrounding the Strait of Hormuz, despite TSMC's strong performance.
During that period, major U.S. indices fell, with the Dow Jones Industrial Average down 0.2%, the S&P 500 down 0.5%, and the Nasdaq down 1.5%. The Philadelphia Semiconductor Index saw a significant drop of 4.3%.
This week, earnings reports from major U.S. tech companies and key domestic firms are expected to be significant factors influencing market direction. Companies such as Alphabet, Intel, and Tesla in the U.S., along with Hyundai Motor, Doosan Enerbility, and KB Financial in South Korea, are set to announce their earnings.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The desire for profit-taking following the surge in the first half of the year, negative outlooks surrounding semiconductors, and supply disruptions due to leverage have led to a chain reaction of declines, weakening the market's fundamentals. Currently, the recovery of semiconductor fundamentals is more critical than leverage-related supply issues, so it is essential to focus on corporate earnings events."
She added, "The KOSPI's 12-month forward price-to-earnings ratio (PER) has fallen to 5.8 times, the lowest level in 20 years, including the lows during the 2008 financial crisis, indicating an excessive decline. It is expected to find support in the mid-6000s."
* This article has been translated by AI.
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