The KOSPI index fell below 6,700 amid heightened caution ahead of the Federal Open Market Committee's (FOMC) regular meeting, as foreign investors and institutional investors sold off together. Most top market capitalization stocks, including major semiconductor giants Samsung Electronics and SK Hynix, declined.
At 10:52 a.m., the KOSPI index was trading down 213.52 points (3.09%) at 6,696.39. Domestic investors bought net 2.2896 trillion won, while foreign investors and institutional investors sold net 2.757 trillion won and 689.4 billion won, respectively.
The KOSPI index initially narrowed its decline to 192.53 points (2.79%) at 6,717.38 right after the market opened but was later pushed down further to 255.09 points (3.69%) lower at 6,654.82.
Samsung Electronics traded down 3.66% at 250,000 won. SK Hynix fell 5.24% to 1.717 million won. Other stocks that declined included △SK Square (-6.70%) △Samsung Electro-Mechanics (-4.43%) △Samsung Life Insurance (-4.07%) △Samsung Electronics Preferred (-3.98%) △Hyundai Motor (-3.40%) △LG Energy Solution (-1.81%) △KB Financial Group (-0.28%).
The sharp decline today is attributed to the U.S. August core consumer price index (CPI), released on the 11th local time, rising 0.3% from the previous month, exceeding market expectations of 0.2%, thereby increasing the likelihood of a rate hike by the Federal Reserve. According to the Chicago Mercantile Exchange's (CME) Fed Watch, which reflects interest rate expectations in the futures market, there is an 86.3% probability that the base rate will be raised at the September FOMC meeting scheduled for the 15th–16th local time.
Additionally, renewed sharp rises in international oil prices due to Middle East tensions weighed on the stock market. It was reported that a key pipeline connecting Saudi Arabia's east and west stopped operations due to a drone attack, and additional news emerged of ships passing through the Strait of Hormuz being hit.
On the other hand, possibilities were raised for low-price buying inflows centered on semiconductors, driven by demand for AI (artificial intelligence) and expectations for the memory sector's performance. Han Ji-young, a researcher at Kiwoom Securities, stated, "This week, the domestic stock market is expected to face inevitable short-term volatility ahead of major monetary policy events." He added, "If the U.S. 10-year Treasury yield stabilizes below 5% and foreign investors resume net buying, the stock market could continue its recovery trend."
He continued, "Given that recent expectations for AI demand and the memory sector outlook remain intact, there is a possibility that buying pressure centered on semiconductors will support the lower bound of the index even during this correction phase."
The KOSDAQ index showed a decline of 11.83 points (1.44%) at 808.81. Domestic investors bought net 131 billion won, while foreign investors and institutional investors sold net 87.7 billion won and 43.7 billion won, respectively.
Stocks that declined included EcoPro BM (-5.08%), EcoPro (-4.38%), AlteoGen (-3.17%), IOTech (-2.58%), Simtek (-2.36%), Rainbow Robotics (-2.29%).
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