Last Friday, South Korea’s stock market was rocked by a circuit-breaker scare. Today, Monday, it went on another roller-coaster ride.
First, last Friday: The Korea Composite Stock Price Index (KOSPI) triggered a Level 1 circuit breaker just three minutes after opening. A drop of more than 8% automatically halts trading for 20 minutes to give the market time to cool off. The index fell to an intraday low of 4,911.28 points, breaking below 5,000 for the first time in nine months. It closed at 5,059.69, down 324.11 points, or 6.02%—its lowest close since March 31. The Korea Securities Dealers Automated Quotations index (KOSDAQ) fell 5.03% to 644.27. The chip giants were hit hardest: Samsung Electronics closed down 6.35% at 188,700 won after falling nearly 10% intraday, while SK Hynix closed down 10.44% at 1,132,000 won after dropping more than 11% intraday. For the week, the KOSPI fell more than 11%, and 720 stocks hit year-to-date lows on the same day.
Now, today, Monday: The market opened down 0.50% at 5,034.20 points, then fell below 5,000 again during the session, reaching a low of 4,990.66. Retail investors and institutions then stepped in to buy the dip. Around 10 a.m. Korea time, the index turned positive, rising 0.92% to 5,106.02. Samsung Electronics gained 2.44% to 193,300 won, while SK Hynix rose more than 3%.
The chain of events is clear: Democrats win both chambers in the U.S. midterm elections → markets bet on tighter regulation of AI data centers → the Nasdaq Composite plunges 5.52% last Thursday, its worst drop in 19 months → panic spreads overnight to Asia: on Friday, the Nikkei 225 falls 5.96%, Taiwan’s Taiex posts its biggest-ever intraday point drop, and South Korea triggers a circuit breaker. Foreign investors net sold 6.16 trillion won in South Korea over two days. Foreign ownership of Samsung Electronics fell to 45.95%, its lowest level in about 17 years, while SK Hynix’s fell to 48.27%, its lowest in about five years.
My take: Don’t rush to treat Monday’s gains as a reversal signal. U.S. chip stocks rebounded on Friday—the Philadelphia Semiconductor Index rose 4.2%—yet Seoul still opened lower on Monday. That suggests foreign investors aren’t buying into this rebound and are still pulling out on their own timetable. Today’s move into positive territory was driven by local Korean retail investors and institutions buying the dip to offset foreign selling. Foreign investors have now been net sellers for seven straight days. The circuit breaker only paused trading for 20 minutes; it couldn’t stop the direction of the outflows.
The real turning points lie ahead: U.S. October Consumer Price Index data are due Tuesday at 21:30 Beijing time, CoreWeave reports after Tuesday’s close, and Applied Materials reports on Thursday. Kiwoom Securities’ projected range for this week is 4,800–5,350 points, leaving about 5%–6% of room in either direction. Even the analysts on the sell side aren’t sure. There are three key risks: A break below the 1 million won level for SK Hynix could trigger another round of technical selling; if the Democrats’ data-center regulation proposal goes ahead, the valuation rationale for chip stocks will need to be reassessed; and the dollar closed at a high of 1,356.6 won on Friday, which could accelerate foreign investors’ retreat.
#韩国股市 #ArtificialIntelligence
First, last Friday: The Korea Composite Stock Price Index (KOSPI) triggered a Level 1 circuit breaker just three minutes after opening. A drop of more than 8% automatically halts trading for 20 minutes to give the market time to cool off. The index fell to an intraday low of 4,911.28 points, breaking below 5,000 for the first time in nine months. It closed at 5,059.69, down 324.11 points, or 6.02%—its lowest close since March 31. The Korea Securities Dealers Automated Quotations index (KOSDAQ) fell 5.03% to 644.27. The chip giants were hit hardest: Samsung Electronics closed down 6.35% at 188,700 won after falling nearly 10% intraday, while SK Hynix closed down 10.44% at 1,132,000 won after dropping more than 11% intraday. For the week, the KOSPI fell more than 11%, and 720 stocks hit year-to-date lows on the same day.
Now, today, Monday: The market opened down 0.50% at 5,034.20 points, then fell below 5,000 again during the session, reaching a low of 4,990.66. Retail investors and institutions then stepped in to buy the dip. Around 10 a.m. Korea time, the index turned positive, rising 0.92% to 5,106.02. Samsung Electronics gained 2.44% to 193,300 won, while SK Hynix rose more than 3%.
The chain of events is clear: Democrats win both chambers in the U.S. midterm elections → markets bet on tighter regulation of AI data centers → the Nasdaq Composite plunges 5.52% last Thursday, its worst drop in 19 months → panic spreads overnight to Asia: on Friday, the Nikkei 225 falls 5.96%, Taiwan’s Taiex posts its biggest-ever intraday point drop, and South Korea triggers a circuit breaker. Foreign investors net sold 6.16 trillion won in South Korea over two days. Foreign ownership of Samsung Electronics fell to 45.95%, its lowest level in about 17 years, while SK Hynix’s fell to 48.27%, its lowest in about five years.
My take: Don’t rush to treat Monday’s gains as a reversal signal. U.S. chip stocks rebounded on Friday—the Philadelphia Semiconductor Index rose 4.2%—yet Seoul still opened lower on Monday. That suggests foreign investors aren’t buying into this rebound and are still pulling out on their own timetable. Today’s move into positive territory was driven by local Korean retail investors and institutions buying the dip to offset foreign selling. Foreign investors have now been net sellers for seven straight days. The circuit breaker only paused trading for 20 minutes; it couldn’t stop the direction of the outflows.
The real turning points lie ahead: U.S. October Consumer Price Index data are due Tuesday at 21:30 Beijing time, CoreWeave reports after Tuesday’s close, and Applied Materials reports on Thursday. Kiwoom Securities’ projected range for this week is 4,800–5,350 points, leaving about 5%–6% of room in either direction. Even the analysts on the sell side aren’t sure. There are three key risks: A break below the 1 million won level for SK Hynix could trigger another round of technical selling; if the Democrats’ data-center regulation proposal goes ahead, the valuation rationale for chip stocks will need to be reassessed; and the dollar closed at a high of 1,356.6 won on Friday, which could accelerate foreign investors’ retreat.
#韩国股市 #ArtificialIntelligence