▲ Employees monitor stock prices and exchange rates at the dealing room of Hana Bank headquarters in Seoul on the 28th. On this day, the Kosdaq plunged by the 8% range, briefly falling below the 700 mark during trading.
The Kospi plummeted by over 10% today (the 28th), recording its second-largest drop in history.
Due to the sharp decline, program trade sell order temporary suspension filters (sell sidecars) were consecutively triggered for both the Kospi and Kosdaq markets from early in the session.
Subsequently, circuit breakers were also activated in both markets.
The Kospi closed at 6,023.66, down 732.09 points (10.84%) from the previous day.
According to the Korea Exchange, the Kospi recorded its second-largest drop on record.
The largest drop was recorded on the 23rd of last month (-910.71 points).
The index opened at 6,400.27, down 355.48 points (5.26%) from the previous session, and widened its losses to briefly hit 5,992.91 (-11.29%) during the session, falling below the 6,000 mark.
However, it slightly recouped its losses thereafter, finishing the session by reclaiming the 6,000 level.
This means the 6,000 mark is being threatened once again, just 27 trading days after celebrating the milestone of the Kospi breaking the 9,000-point mark for the first time in history during intraday trading on the 18th of last month.
Based on the closing price, the index is down about 36% from its previous all-time high (an intraday high of 9,385.59) recorded on the 19th of last month.
Amid the plunge, a sell sidecar was triggered for the Kospi market around 9 a.m., but the downward trend continued to expand afterwards.
At 10 a.m., a circuit breaker was triggered, suspending trading in the Kospi market for 20 minutes.
Meanwhile, the Kospi 200 Volatility Index (VKOSPI), dubbed the "Korea-version fear index," rebounded for the first time in 7 trading days, surpassing the 80 mark.
The VKOSPI surged 7.58% from the previous day to close at 83.43.
Foreigners sold more than 4 trillion won today, while retail investors conversely bought in the range of 4 trillion won.
At market close, foreigners on the main bourse (Kospi) recorded a net selling of 4.9914 trillion won.
This marks the largest net selling in about a month since June 29 (7.7560 trillion won in net selling).
This is a net selling streak for 3 consecutive trading days.
On the other hand, retail investors continued their net buying at 4.3273 trillion won, and institutions also maintained a buying advantage with 633.1 billion won.
Foreigners also showed a selling advantage of 5.5 billion won in the Kospi 200 futures market.
Earlier, semiconductor stocks had also shown weakness in the New York stock market.
The tech-heavy Nasdaq Composite Index fell 0.18%.
Following news that China had embarked on developing deep ultraviolet (DUV) lithography equipment used for semiconductor manufacturing, concerns over intensified global competition caused ASML to plummet by 5.80%.
Nvidia (-4.99%), SanDisk (-11.02%), and Micron (-2.25%) declined, and the Philadelphia Semiconductor Index fell 2.23%.
SK Hynix's American Depositary Receipts (ADRs) also plunged by 7.47%.
Analyses suggest that the listing of Chinese semiconductor company ChangXin Memory Technologies (CXMT) on the Shanghai Stock Exchange the previous day is also affecting the supply and demand for Samsung Electronics and SK Hynix.
Seo Sang-young, managing director at Mirae Asset Securities, explained, "The market evaluated that if China successfully domesticates the lithography process, which is considered the highest technological barrier in semiconductor manufacturing, localization could rapidly spread to other process equipment as well." He added, "As these changes highlight China's expansion of memory production capacity and intensified global semiconductor competition, profit-taking sales spread across the entire artificial intelligence (AI) semiconductor value chain."
Consequently, the domestic stock market appeared to follow the sharp decline of the semiconductor "two-top" firms, Samsung Electronics and SK Hynix.
The fact that SK Hynix's earnings announcement is just a day away on the 29th also appears to have heightened caution.
Samsung Electronics (-13.39%) finished trading at 220,000 won today.
The drop rate exceeding a steep 10% marked Samsung Electronics' 4th-largest decline in history, rewriting its largest drop in about 17 years since the financial crisis on October 24, 2008 (-13.76%).
This means it has experienced a correction of over 41% in just over a month since hitting its previous peak (374,500 won) on the 19th of last month.
SK Hynix (-14.65%) slid down to 1.55 million won.
Although it came close to 3 million won with its all-time high set last month (2.987 million won on June 25), it has now fallen by more than 48% compared to that level.
Both stocks slumped to their lowest levels this month.
Han Ji-young, an analyst at Kiom Securities, analyzed, "Although specific corporate names, performance, and mass production schedules for Chinese companies' development of DUV lithography equipment have not been disclosed, such news further cooled investment sentiment amidst an already damaged semiconductor narrative."
She added, "While the market's own immunity has significantly weakened in the process of facing serial corrections, technical indicators such as valuations and the Relative Strength Index (RSI) all point to oversold conditions."
Yang Hyung-mo, an analyst at DS Investment & Securities, stated, "The factors pressing down on the market today can be summarized as China's development of its own lithography equipment, local warfare involving Iran, and the newly surfaced discussion on interest rate hikes," but noted, "Breaking down these three factors, not much is new."
He further analyzed, "We read this not as an additional negative factor, but as a signal of a phase shift," adding, "The Kospi has entered a zone where the possibility of a rebound from the bottom is high for the first time today."
SK Square (-15.60%) and Samsung Electro-Mechanics (-15.92%) plummeted by double digits, while many other top market cap stocks such as Hyundai Motor (-9.68%), LG Energy Solution (-5.71%), and KB Financial (-4.29%) also closed lower.
Only a few showed strength, including Samsung Biologics (0.26%) and LIG Nex1 (0.14%).
By sector, electrical/electronic (-13.60%), manufacturing (-11.81%), and medical/precision equipment (-10.95%) saw sharp declines, with all sectors within the Kospi finishing lower.
Meanwhile, the Kosdaq index closed at 705.85, down 59.01 points (7.72%).
During the session, the index briefly sank to 697.45 (-8.81%), breaking away from the 700 mark for the first time in 1 year and 3 months since April 16 of last year.
Amid the sharp decline, a sell sidecar was also triggered in the Kosdaq market during the morning session.
Subsequently, a circuit breaker was triggered around 12 p.m., temporarily halting trading.
In the Kosdaq market, institutions alone recorded a net selling of 134.5 billion won.
Retail investors and foreigners maintained a buying advantage with 51.4 billion won and 82.8 billion won, respectively.
Top market cap companies in the Kosdaq market that had shown upward trends the previous day—such as Alteogen (-4.97%), EcoPro BM (-7.87%), EcoPro (-9.80%), Rainbow Robotics (-10.20%), and Jusung Engineering (-14.08%)—turned downward again today.
Trading values for the main bourse (Kospi) and the Kosdaq market were tallied at 35.6973 trillion won and 4.7490 trillion won, respectively.
The total trading value for the pre-market and main market of the alternative trading system Nextrade was 15.2080 trillion won.
(Photo: Yonhap News)
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