Kospi Plummets 5.9% to Fall Below 6,000 Mark... Dropping Over 1,000 Points in Two Days

Following yesterday's (the 28th) plunge, the Kospi slid nearly 6% today (the 29th), falling below the 6,000 threshold.

Amid the steep decline in the domestic stock market, program trading sell sidecars—which temporarily suspend sell quote orders—and circuit breakers, which halt trading for 20 minutes, were triggered for both the Kospi and Kosdaq markets for the second consecutive day.

According to the Korea Exchange, this marks the first time circuit breakers have been triggered for both markets on consecutive days.

A circuit breaker is a market-cooling measure activated as a stage 1 measure when the Kospi or Kosdaq index drops by 8% or more compared to the previous day and that situation persists for one minute.

On this day, the Kospi finished the session down 360.42 points (5.98%) at 5,663.24.

This is about 40% down from its previous peak (an intraday high of 9,385.59) recorded on the 19th of last month.

Combined with yesterday's 10.84% plunge, the index has plummeted by a total of 1,092.51 points (16%) over the two days since the 27th (6,755.75).

The index started the day up 65.45 points (1.09%) at 6,089.11 and briefly recovered to 6,228.52 (3.40%) in early trading.

However, it subsequently relinquished its gains, turned downward, and even plunged to 5,262.77 (-12.63%).

Amid the sharp decline, a sell sidecar was triggered on the main bourse at around 10:55 AM, and as the downward momentum accelerated, a circuit breaker was activated at 12:32 PM.

Consequently, the gap between the intraday high and low reached 965.75 points, marking the second-highest on record.

The record high of 971.61 points was set on the 23rd of last month.

The Kospi 200 Volatility Index (VKOSPI), referred to as South Korea's "fear gauge," surpassed the 90 mark once again during intraday trading.

The VKOSPI closed at 87.79, up 5.23% from the previous day, and spiked to 93.27 during the session.

Retail investors, who had maintained a buying spree for three consecutive sessions up until yesterday, turned to net sellers today.

At the market close, individual investors registered a net sell volume of 1.9655 trillion won on the main bourse.

Foreign investors also shifted to selling, unlike the early session, recording a net sell of 1.23 trillion won.

Conversely, institutional investors were the sole net buyers, with a buying advantage of 3.1576 trillion won.

However, foreign investors posted a net purchase of 301 billion won in the Kospi 200 futures market.

The domestic stock market opened higher today due to bargain hunting following the previous day's sharp decline, but turned downward during the session amid lingering concerns regarding semiconductors.

When the U.S. Central Command, which oversees U.S. military operations against Iran, announced that Iranian forces had launched ballistic missiles toward U.S. military bases in the Middle East, West Texas Intermediate (WTI) crude futures—which had plummeted until the previous day—rose by 3% to 4% during the session, surpassing the 80 dollar mark.

This further dampened investor sentiment.

The Central Command stated via X (formerly Twitter), "At 5:45 PM today Eastern Time, Islamic Revolutionary Guard Corps (IRGC) units launched multiple ballistic missiles from Iran in an attempted surprise attack on U.S. military bases in the Middle East."

In particular, semiconductor sentiment appears to have worsened because SK Hynix's second-quarter earnings, announced before the market opened, recorded a record quarterly performance but fell short of market expectations.

SK Hynix disclosed that its preliminary operating profit for the second quarter of this year was provisionally tallied at 60.5426 trillion won, marking a 557.2% increase compared to the same period last year.

This figure is 4.7% below the market consensus of 63.5526 trillion won compiled by Yonhap Infomax.

Revenue for the same period came to 79.3187 trillion won, showing a 256.8% increase from the same period last year.

SK Hynix projected that memory demand growth will likely persist as big tech companies expand their investments in AI infrastructure, leading to a succession of additional supply requests, and as these investments are driven by revenues generated from AI services.

Based on this demand outlook, the company stated that it has concluded long-term supply agreement (LTA) negotiations with about 10 customers and is continuing additional discussions with major clients.

SK Hynix (-9.61%) finished trading at 1.401 million won.

Although it started the session with a gain of over 1%, it turned downward during the day and tumbled all the way down to 1.246 million won (-19.61%).

SK Hynix's stock price came close to 3 million won with an all-time high set last month (2.987 million won on June 25), but is currently down more than 53% compared to that level.

Samsung Electronics fell 5.23% to 208,500 won.

After hitting its previous peak (374,500 won) on the 19th of last month, it has undergone a correction of over 44% in a little over a month.

Samsung Electronics plunged by up to 14.00% at one point during today's session, hitting 189,200 won.

Han Ji-young, an analyst at Kiome Securities, stated, "The causes of today's domestic market decline can be defined as SK Hynix's second-quarter earnings missing the consensus, weakened expectations for shareholder returns, and the resurgence of uncertainties regarding U.S.-Iran negotiations."

She also pointed out, "Rather than that, the essence of today's plunge is that expectations that the market would rebound today after yesterday's double-digit drop have receded, prompting the majority of stock holders to lock in losses and driving panic selling."

She added, "In addition, the explosive trading of single-stock inverse products appears to be amplifying this secondary volatility output."

Lee Kyung-min, an analyst at Daishin Securities, noted, "In a market expecting a rebound trigger, dump-like selling emerged, centered around semiconductors." He added, "As sluggish stock price trends further dampened investor sentiment, net selling by retail investors expanded and panic selling continued."

In particular, he said, "During the conference call following SK Hynix's second-quarter earnings announcement, the company stated that it signed LTAs with about 10 customers, set the contract period at a basic 5 years, and structured prices to respond to market volatility." He added, "Unlike Micron, unclear explanations left concerns over the semiconductor industry lingering, and a lack of specific measures regarding shareholder returns added to disappointment."

Among other market-cap heavyweights, most declined, including SK Square (-8.11%), Samsung Electro-Mechanics (-7.63%), Hyundai Motor (-2.88%), LG Energy Solution (-4.30%), and Samsung Biologics (-4.52%).

A few stocks bucked the downtrend with gains, including Celltrion (1.47%), Hyundai Mobis (1.14%), and Woori Financial Group (-0.94%).

By sector, almost all industries were weak, led by construction (-9.05%), medical and precision equipment (-7.73%), and electrical and electronics (-7.37%).

Food, beverage, and tobacco (1.31%) was the only sector to rise.

The Kosdaq index also closed down 43.17 points (6.12%) at 662.68, following yesterday's steep fall (-7.72%).

Compared to this year's Kosdaq intraday peak (1,229.42) recorded on April 27, it has plunged by 46%.

The index opened up 7.86 points (1.11%) at 713.71, but subsequently turned downward and finished the session below the 700 mark.

During the session, it briefly slumped to 630.99 (-10.61%).

Amid the sharp decline, a sell sidecar was triggered in the Kosdaq market during the morning session, just like the previous day.

Subsequently, a circuit breaker was triggered around 12:00 PM, temporarily halting trading.

The Kosdaq index has fallen 102.18 points (13%) over the two days up to today.

In the Kosdaq market, retail investors were the sole net sellers, offloading 457.6 billion won.

Foreign and institutional investors maintained a buying advantage of 307.1 billion won and 146.9 billion won, respectively.

Alteogen (-4.72%), EcoPro (-7.29%), EcoPro BM (-9.04%), and Jusung Engineering (-9.86%) plummeted, whereas Rainbow Robotics (2.50%), HLB (2.80%), and PharmaResearch (4.13%) advanced.

Trading values for the main bourse and the Kosdaq market were tallied at 48.9041 trillion won and 6.4541 trillion won, respectively.

The combined pre-market and main market trading value of the alternative trading system Nextrade reached 26.1092 trillion won.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.