KOSPI fell more than 4%, dropping below the 5,400 mark due to a massive sell-off by foreign investors. Concerns over increased regulations on artificial intelligence (AI) data centers following the U.S. midterm elections have led to a surge in selling, particularly among major semiconductor stocks. The KOSDAQ also declined by over 4%, losing the 700 mark.
According to the Korea Exchange, as of 12:53 p.m. on November 5, KOSPI was trading at 5,440.41, down 243.39 points (4.28%) from the previous trading day.
In the securities market, foreign investors led the decline with a net sell of 1.9395 trillion won. Meanwhile, individual and institutional investors bought a net 1.4458 trillion won and 308.2 billion won, respectively, but their purchases were insufficient to mitigate the losses.
Most of the top market capitalization stocks are in the red. Samsung Electronics is trading at 204,500 won, down 6.19%, while SK Hynix has fallen 8.45% to 1,278,000 won. Other declining stocks include SK Square (-9.23%), Samsung Electro-Mechanics (-11.48%), and LG Energy Solution (-1.27%).
Conversely, Hyundai Motor (4.41%), KB Financial (3.37%), Celltrion (6.50%), and Samsung Biologics (1.47%) are showing positive trends, indicating a divergence in market performance.
The KOSDAQ index also dropped over 4%. At the same time, KOSDAQ was trading at 686.21, down 28.74 points (4.02%) from the previous day. The index fell below the 700 mark just a day after recovering it, with losses continuing to expand.
In the KOSDAQ market, foreign and institutional investors sold a net 172.1 billion won and 40.6 billion won, respectively, while individual investors bought a net 208.7 billion won.
Among the top market capitalization stocks, semiconductor-related stocks such as Simtek (-15.20%), EO Technics (-14.71%), and JUSUNG Engineering (-9.10%) are experiencing significant declines. Other stocks like EcoPro (-2.60%), EcoPro BM (-5.04%), Rainbow Robotics (-3.46%), and HLB (-3.43%) are also down. In contrast, Alteogen has risen by 4.90%.
The sharp decline in the domestic stock market is attributed to growing concerns over a slowdown in AI data center investments following the U.S. midterm elections. With the Democratic Party controlling both the House and Senate, fears have emerged regarding potential regulations on new data center construction and delays in investments, which could dampen semiconductor demand and investor sentiment.
Despite the Dow Jones Industrial Average rising 3.03% overnight, major semiconductor stocks like NVIDIA and Micron fell. Although international oil prices dropped by over 8%, easing inflation concerns, selling pressure on domestic semiconductor stocks continues.
Lee Kyung-min, a researcher at Daishin Securities, noted that the Democratic Party's control of both chambers of Congress has raised expectations for an early end to the Iran conflict, contributing to a significant drop in international oil prices. However, he cautioned that geopolitical uncertainties remain, as Iran has warned of retaliation against Gulf countries cooperating with U.S. military operations.
Additionally, while the U.S. added 86,000 jobs in October, exceeding market expectations of 67,000, the services sector's Purchasing Managers' Index (PMI) showed weaker-than-expected performance. Analysts suggest that attention should be paid to future U.S. economic indicators and changes in monetary policy.
* This article has been translated by AI.
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