Investment sentiment in semiconductor stocks, frozen by a surge in China's Changxin Memory, spread across the entire KOSPI and KOSDAQ markets, causing the KOSPI to plummet by over 10%. The KOSDAQ saw its intraday level below 700 for the first time in one year and three months.
On the 28th, the KOSPI closed at 6,023.66, down 732.09 points (10.84%) from the previous trading day. Starting the day at 6,400.27, a drop of 355.48 points (5.26%), the KOSPI triggered a sell-side sidecar (futures market circuit breaker) at 9:06 a.m., followed by a sharp decline into the 8th% range. At 10:13 a.m., a circuit breaker was activated. This marked the eighth circuit breaker activation of the year and the third this month alone.
The KOSDAQ market also saw both a sell-side sidecar (futures market circuit breaker) and a circuit breaker triggered in succession. The sell-side sidecar was activated at 9:14 a.m., and the circuit breaker was triggered at 12:01 p.m. This was the third KOSDAQ circuit breaker activation of the year.
Activation of the sidecar (futures market circuit breaker) has become routine. In the KOSPI market, a total of 42 sidecars were triggered, while in the KOSDAQ market, it occurred 26 times. Of these, 22 and 12 were sell-side activations, respectively.
Analysts attribute the sharp declines in both KOSPI and KOSDAQ to concerns over domestic semiconductor supply and demand following a surge in China's Changxin Memory (CXMT) stock prices. Lee Kyung-min, a researcher at Daishin Securities, stated, "The domestic stock market plummeted as foreign investors sold off heavily, particularly in the semiconductor sector." He added, "News that a Chinese company has begun producing its own deep ultraviolet (DUV) lithography equipment has raised concerns about China's growing equipment self-reliance in the semiconductor industry and its ability to ease bottlenecks in expansion for Chinese memory firms like CXMT."
The $250 billion guarantee related to Nvidia's investment in OpenAI data centers also contributed to concerns about "circular financing within the AI ecosystem," according to the same researcher. He noted, "In the U.S. stock market, Nvidia, Micron, and SanDisk all fell sharply, exerting downward pressure on the domestic semiconductor sector. Additionally, the sharp decline in Kioxia and widening losses in U.S. memory stocks during after-hours trading further worsened sentiment across the entire memory industry."
According to data from Korea Exchange's Data Marketplace, as of 4:14 p.m., retail investors purchased a net amount of 4.3339 trillion won, while institutional investors bought a net 629.9 billion won. In contrast, foreign investors sold off a net 4.9916 trillion won.
Samsung Electronics and SK Hynix both plummeted. Samsung Electronics closed at 220,000 won, down 34,000 won (13.39%), while SK Hynix closed at 1.555 million won, down 266,000 won (14.65%). SK Square fell 15.60%, Samsung Electro-Mechanics dropped 15.92%, and another Samsung Electro-Mechanics entity declined 10.16%. Only Samsung Biologics closed slightly higher among the top market capitalization sectors.
The KOSDAQ market closed down over 7% due to net selling by institutional investors, ending at 705.85, a drop of 59.01 points (7.72%) from the previous trading day.
In the KOSDAQ market, retail investors bought a net 49.9 billion won, and foreign investors purchased a net 83.8 billion won, while institutional investors sold off a net 139.9 billion won.
While all sectors declined, non-metallic minerals, machinery equipment, and electrical/electronic components fell by more than 10%.
Among the top market capitalization sectors, Pharmicure rose over 1%, and Peptron surged by over 10%. AlteoGen fell over 4%, EcoPro BM dropped over 7%, while RAINBOW Robotics, Juseong Engineering, Reno Industrial, Wonik IPS, PSK, and IOTech declined by more than 10%.
On this day in the Seoul foreign exchange market, the won/dollar exchange rate traded at 1,462.5 won as of 3:30 p.m., down 6 won from the previous trading day.
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