The KOSPI index closed down over 3% amid simultaneous selling by foreign and institutional investors. Concerns over profitability have persisted in the market as large-scale funding announcements for AI (artificial intelligence) infrastructure investment, centered on U.S. tech companies, have been made one after another.
On the 3rd, the KOSPI ended trading at 5648.79, down 210.29 points (3.59%) from the previous session. The index showed a volatile market, maintaining a decline of 2% to over 4%. The KOSPI opened at 5715.19, holding above the 5700th line, but soon fell by over 3%, trading around the 5600th line. It later recovered the 5700th line on net buying by other corporate entities and even rose to the 5730th line at one point, but widened its decline to over 4% intraday, dropping as low as 5615.80.
The securities industry diagnoses that the capital burden from AI investment highlighted in the U.S. stock market overnight pulled down the KOSPI index on this day. In New York on the 2nd (local time), international oil prices (WTI) plunged by over 7% as a peace agreement between the United States and Iran gained momentum, but selling emerged centered on tech stocks as concerns over AI investment profitability arose. The S&P 500 index closed at 7541.40, down 38.67 points (0.51%) from the previous close, while the NASDAQ Composite Index ended trading at 25,164.32, down 272.68 points (1.07%). The Dow Jones 30 Industrial Average closed at 51,983.98, up 213.67 points (0.41%) from the previous close.
The decisive news was that Oracle announced plans to raise a total of $20 billion—$10 billion each through a rights offering (paid-in capital increase) (common stock) and corporate bonds—to fund AI infrastructure investment. Oracle's stock price plunged 8.8%, and semiconductor stocks such as Micron Technology (-5.80%), AMD (-7.52%), Intel (-8.83%), and Arm (-4.57%) also fell in tandem.
Yang Hyeon-gyeong, a researcher at iM Securities, analyzed, "Despite the decline in international oil prices and U.S. long-term interest rates due to expectations for negotiations between the United States and Iran, tech stocks showed weakness, indicating that the market is focusing on AI investment payback and funding burdens rather than falling interest rates." She added, "While expectations for AI infrastructure demand remain, the market is reacting sensitively to the increase in debt and equity dilution burden accompanying expanded investment."
In the KOSPI market (based on Korea Exchange data) on this day, foreign and institutional investors made net sales of 1.5298 trillion won and 514.7 billion won, respectively. Retail investors made net purchases of 1.6643 trillion won. Other corporate entities, estimated to be primarily buying SK hynix shares for its share buyback, purchased 365.7 billion won worth of stocks. SK hynix's 20 trillion won share buyback began on the 29th of last month and is scheduled to end at the end of January next year.
Among KOSPI sectors, medical and precision equipment plunged by over 7%. Machinery and equipment closed down in the 5% range, while electrical and electronics ended weak in the 4% range. Chemicals and construction fell by more than 3%. Metals, IT (information and communications) services, securities, and insurance dropped by more than 2%. Distribution, transportation and warehousing, and textiles and apparel fell by more than 1%. Transportation equipment and parts, electricity and gas, telecommunications, and real estate remained slightly down. Paper and wood, pharmaceuticals, and food and tobacco ended trading slightly up.
Among top KOSPI market capitalization stocks, Samsung Electronics and SK hynix fell in the 4th% and 5% ranges, respectively, failing to hold "220,000-won Electronics" and "1.4 million-won Nix." SK Square and LG Energy Solution dropped in the 5% range, while Samsung Electro-Mechanics plunged in the 7% range. Hyundai Motor and Samsung Life Insurance fell by more than 3%. Samsung C&T dropped in the 2% range, and KB Financial Group fell in the 1% range. Among the top 10 stocks by market capitalization, Samsung Biologics Co., Ltd. was the only one to close up in the 2% range.
The KOSDAQ closed at 704.39, down 29.97 points (4.08%) from the previous session.
In the KOSDAQ market, foreign and institutional investors sold off 76.3 billion won and 234.5 billion won worth of stocks, respectively. Retail investors bought 319.9 billion won worth of stocks.
Among KOSDAQ sectors, machinery and equipment fell by more than 6%. Machinery and equipment, non-metals, and electrical and electronics slid in the 5% range. Metals and manufacturing dropped in the 4% range, while transportation equipment and parts, finance, and medical and precision equipment fell in the 3% range. Chemicals, distribution, construction, and pharmaceuticals declined by more than 2%. IT services and textiles and apparel fell by more than 1%. Telecommunications remained slightly down, while transportation and warehousing and paper and wood closed slightly up.
In the KOSDAQ market as well, nine of the top 10 stocks by market capitalization closed lower. The decline in semiconductor materials, components and equipment stocks was prominent, with Iotech falling in the 8% range, and Jusung Engineering and Wonik IPS plunging in the 7% range. Rino Industrial, ranked 10th by market capitalization, fell in the 6% range. It showed a larger drop than Samchundang Pharm, which was ranked 11th intraday, causing the 10th and 11th positions to swap at one point. Alteogen was the only stock to close up, ending slightly higher.
In the Seoul foreign exchange market on this day, the won/dollar exchange rate closed daily trading at 1,341.0 won, down 2.8 won from the previous session's closing price.
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