On the 15th, following a sharp drop in the KOSPI, market capitalization evaporated by 286.8 trillion won compared to its annual high (June 22). Of this amount, the combined market cap of semiconductor giants Samsung Electronics and SK Hynix reached 199.7 trillion won, prompting analysis that the structural vulnerability of the KOSPI, which relies heavily on the semiconductor sector, has once again been exposed. With foreign outflows accelerating due to rising US Treasury yields and expectations of a tightening monetary policy, it is projected that recovery will not be easy in the short term.
On this day, the KOSPI closed regular trading at 5,554.22, down 454.29 points (7.57%) from the previous trading session. This marked the first time the KOSPI had fallen below the 5,500 mark since July 30 (5,593.56).
Market capitalization, which had surpassed 700 trillion won, plunged to the 400th trillion won range. According to the Korea Exchange, the KOSPI market cap on this day was 458.11786 trillion won, a decrease of 286.84141 trillion won from the annual high of 744.95927 trillion won recorded on June 22. In less than four months, 38.5% of the market cap has vanished.
Analysis suggests that the October crash revealed a structural vulnerability reliant on just two stocks: "Samsung Electronics and SK Hynix." The market cap of Samsung Electronics, which was approximately 206.7 trillion won on June 22, fell to 122.8 trillion won on this day, while the market cap of SK Hynix dropped from 208.0 trillion won to 92.2 trillion won. The evaporation of 199.7 trillion won from just these two stocks accounted for 70% of the total decline in KOSPI market capitalization. This proportion is higher than the share (approximately 47%) that these two stocks hold within the KOSPI.
As foreign investors have been net sellers centered on large-cap semiconductor stocks, forecasts indicate that a recovery in the KOSPI will not be easy for the time being. Park Yeon-ju, head of the Research Center at Mirae Asset Securities, stated, "The most significant factor behind the sharp drop in the KOSPI was the concern over whether massive AI investments would yield sufficient returns, arising from the slowdown in Anthropic's third-quarter revenue growth rate compared to the previous quarter and the decline in bond prices for AI cloud company CoreWeave." He added, "Amid high volatility in the Korean stock market, foreign investors have moved to take profits, yet there is no clear buying force."
Yoon Seok-mo, head of the Research Center at Samsung Securities, noted, "Because semiconductor companies such as Samsung Electronics and SK Hynix account for a very large share of both market capitalization and exports, they received the shock from the plunge in the Philadelphia Semiconductor Index and global doubts about the sustainability of AI investments more directly." He pointed out, "With US 10-year Treasury yields soaring to 5.3%, safe-haven US bonds are offering high yields, significantly reducing the relative investment appeal of the Korean stock market as an emerging market equity."
In fact, foreign investors' exit from "Samsung Electronics and SK Hynix" has been intense over the past month. According to the Korea Exchange, foreign investors sold off 16.8841 trillion won worth of SK Hynix and 6.9766 trillion won worth of Samsung Electronics over the last month. SK Hynix and Samsung Electronics are the only stocks that have seen net selling in the trillions of won range over a one-month period. The stock with the next highest net selling amount was Doosan Enerbility (958.7 billion won), showing a significant gap in net selling proceeds compared to the top two.
Lee Jong-hyung, head of the Research Center at Kiwoom Securities, said, "Recent foreign selling is not merely profit-taking but the result of global risk asset allocation adjustments and a reassessment of expectations for the semiconductor sector acting together." He added, "It is necessary to monitor whether foreign selling intensity slows down and whether there is a shift to buying in semiconductor stocks to determine if supply and demand will improve."
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