KOSPI Plunges 3% Again... Why Is Korea Falling Harder?

[Anchor]

The KOSPI, which appeared to have hit rock bottom and rebounded, has suffered another sharp plunge. Analysts attribute the drop to a combination of concerns over AI profitability and geopolitical instability in Europe.

Reporter Kim Hye-min has the story.

[Reporter]

The KOSPI gave up all of its gains accumulated over the past two days.

At one point during the morning session, it fell by 4.7%, briefly breaking below the 5,500 mark.

Although it trimmed some of its losses in the afternoon, the index closed down 3.7%, or 215 points, at 5,552.

SK Hynix plummeted more than 7% at one point to 1,183,000 won, dropping below the 1,200,000 won threshold during intraday trading for the first time in about six months since last April.

Wall Street, which had been rebounding on bargain-hunting, saw its late-session gains shrink as concerns over the profitability of AI investments re-emerged, and that fallout spilled over into the domestic stock market.

[Noh Dong-gil / Researcher, Shinhan Securities]: "Rather than an issue specific to the South Korean stock market, it appears to be a phase where concentrated weightings in semiconductors are being trimmed. In this phase, there needs to be a buying subject to step in, but the supply-and-demand balance is somewhat vacant..."

Compounding the pressure, large-scale protests in France escalated into violence, causing French government bond yields to spike. This led to a rise in U.S. Treasury yields, further dampening investor sentiment.

Major Asian stock markets, including Japan, Taiwan, and Hong Kong, also weakened, but not to the extent of the KOSPI.

Analysts point out that the domestic market has a high concentration of memory semiconductors, and SK Hynix, in particular, is exposed to higher volatility than Samsung Electronics, whose businesses are more diversified into home appliances and mobile devices.

[Lee Hyo-seob / Head of Financial Industry Research, Korea Capital Market Institute]: "As the technological gap with Changxin Memory narrows rapidly and supply expands swiftly, the upward trend in memory semiconductor prices is likely to slow down starting in 2028. On the other hand, system semiconductors still maintain a technological gap, resulting in relatively milder share price declines."

With the KOSPI plunging more than 20% from its peak this month, the scale of forced liquidation (margin calls) among retail investors—whose holdings are automatically sold off due to insufficient margin deposits—has exceeded 50 billion won for five consecutive trading days.

(Video Editing: Ahn Yeo-jin, Design: Kim Min-young)
※ Please note: This article was translated by AI and may contain errors.