Last week, South Korea's stock market plummeted by over 14%, and it is facing renewed downward pressure at the start of this week. Concerns about credit risks for artificial intelligence (AI) companies in the U.S. have intensified selling pressure, particularly on semiconductor stocks. Major companies like Samsung Electronics and SK Hynix are experiencing significant pre-opening declines, raising fears of a repeat of 'Black Monday.'
According to the Korea Exchange, as of 8:17 a.m., Samsung Electronics was trading at 203,000 won, down 5.80% from the previous trading day. SK Hynix fell 6.84% to 1,185,000 won, while SK Square dropped 7.40% to 726,000 won.
Last week, the domestic stock market was hit hard by massive foreign selling. The KOSPI index fell 14.46% from October 12 to 16. During this period, foreign investors sold over 11 trillion won in the stock market, leading the index decline. The semiconductor sector was particularly affected, resulting in increased volatility for Samsung Electronics and SK Hynix shares.
In the U.S. market, technology stocks continued to decline. On October 16, the Nasdaq Composite closed down 2.15% at 26,140.03. The S&P 500 fell 1.09% to 7,659.44, and the Dow Jones Industrial Average decreased by 0.34% to 52,002.41. The Philadelphia Semiconductor Index dropped 3.83%.
At the center of market anxiety is the funding burden faced by AI infrastructure companies. Concerns have grown regarding the credit risks of firms like CoreWeave, which have expanded data center investments through large borrowings, raising doubts about whether increased AI investments will translate into actual profits.
Han Ji-young, a researcher at Kiwoom Securities, stated, "Last week, the KOSPI fell over 14% due to the spread of credit concerns surrounding AI stocks and foreign selling concentrated in semiconductors. The recent series of declines has cooled investor sentiment, leading to a more cautious approach that favors selling on rebounds rather than buying at lower prices."
The researcher projected the KOSPI range for this week to be between 5,200 and 5,900. He noted, "Given the impact of last Friday's sharp decline in U.S. AI stocks, the domestic market is expected to face downward pressure on Monday. However, since the domestic market has already undergone excessive adjustments compared to other markets, there may be a rebound during the week, even amid weak pressures."
However, the rebound in U.S. stock index futures may limit the extent of the decline. On the morning of October 19, Nasdaq futures rose by about 0.6% in after-hours trading, interpreted as a response to last week's sharp drop in tech stocks.
Seo Sang-young, a researcher at Mirae Asset Securities, explained, "The current rise in Nasdaq futures is primarily due to a rebound from last week's excessive declines in AI and semiconductor sectors. The trends in international oil prices, stability of U.S. Treasury yields, and maintenance of Nasdaq futures gains will be crucial."
This week, earnings reports from major U.S. tech companies are expected to be a key factor influencing market direction. Results from Meta, Tesla, and Lam Research will provide insights into whether increased investments in AI-related facilities are translating into improved profitability. In South Korea, major corporate earnings, the Bank of Korea's monetary policy committee meeting, and export figures until October 20 are also on the agenda.
* This article has been translated by AI.
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