PiCK
KOSPI, Kosdaq Sink More Than 6% as Sell Sidecars Trigger in Both Markets
Summary
- The KOSPI and Kosdaq both plunged more than 6%, triggering sell sidecars in both markets.
- Samsung Electronics and SK Hynix fell more than 7% and 8%, respectively, as rising US inflation, anxiety over AI investment, and weaker sentiment toward semiconductor shares hit the market.
- A rise in the US consumer price index (CPI) for September highlighted the chances of another Fed rate hike, increasing selling pressure on technology and growth stocks.
Forecast Trend Report by Period
A US inflation shock and anxiety over artificial intelligence investment hit South Korea’s stock market. Shortly after the open on October 15, both the KOSPI and Kosdaq fell more than 6%, triggering sell sidecars in both markets. Most heavyweight stocks, including semiconductor shares, also declined.
As of 9:23 a.m., the KOSPI stood at 5,641.71, down 367.10 points, or 6.11%, from the previous session. The benchmark opened 5.59% lower and extended losses as selling intensified. At 9:07 a.m., a sidecar temporarily suspending program sell orders was triggered, the second such move in two days after one was activated on October 13.
The Kosdaq also failed to escape the selloff. After opening 4.79% lower than the previous trading day, the index fell to 767.70 at the same time. That marked a drop of 56.18 points, or 6.82%. A sell sidecar for the Kosdaq market was triggered at 9:12 a.m.
Samsung Electronics fell more than 7%, while SK Hynix dropped more than 8%. Investor sentiment toward AI-related stocks weakened overnight in the US after debt concerns surrounding AI cloud company CoreWeave came into focus and Gartner warned that returns on AI investment may fall short of expectations. That also weighed on hopes that expanded data-center investment would lift semiconductor demand.
Weakness spread to other large-cap stocks. The top 10 KOSPI stocks by market capitalization all fell, including SK Square, LG Energy Solution, Samsung Electro-Mechanics, Hyundai Motor, KB Financial Group, Samsung Biologics, Samsung Life Insurance and Samsung SDI. On the Kosdaq, Alteogen, EcoPro, EcoPro BM, Jusung Engineering and Rainbow Robotics declined. HLB, LEENO Industrial, EO Technics, Wonik IPS and Simmtech also traded lower.
Trading flows diverged by market. In the KOSPI market, foreigners were net sellers of 982.8 billion won, while institutions were net buyers of 951.4 billion won and retail investors bought a net 4.1 billion won. On the Kosdaq, retail investors were net sellers of 112 billion won, while foreigners and institutions bought 106.8 billion won and 8.2 billion won, respectively.
The move away from risk assets was driven by higher US inflation. The US consumer price index for September rose 3.7% from a year earlier, above the market forecast of 3.6%. That increased the likelihood of another Federal Reserve rate hike and added to selling pressure on technology and growth stocks.
US stocks also fell on October 14, led by technology shares. The Nasdaq Composite dropped 1.88%. The S&P 500 fell 1.11%, while the Dow Jones Industrial Average slipped 0.09%. Concerns over US interest rates and AI investment are now spilling over into South Korea’s equity market.
