KOSPI's 'Black Monday': Index Falls Below 7,000 for the First Time in Two Months

[Anchor]

The KOSPI plunged by 9% in a single day, falling to the 6,800 level and returning to where it stood two months ago. Predicting whether the market will rise or fall in the short term has become unreliable, and investors are advised to reconsider debt-financed investments in such a highly volatile market.

Reporter Jeong Seong-jin has the story.

[Reporter]

The KOSPI opened slightly lower at 7,412 and, after repeated fluctuations, rapidly expanded its losses.

A sidecar was triggered as the KOSPI 200 futures index fell by more than 5%, and the 7,000 mark collapsed shortly after noon.

Subsequently, a circuit breaker was triggered, halting trading for 20 minutes as the index plummeted by more than 8%.

This marks the 7th circuit breaker this year and the 13th in history.

The KOSPI eventually closed at 6,806, a sharp decline of nearly 9%, returning to levels seen about two months ago.

The crash was largely driven by the sharp decline of the two market leaders, Samsung Electronics and SK Hynix.

SK Hynix plummeted by more than 15%, falling below the 2 million won mark to close in the 1.8 million won range, while Samsung Electronics fell 10% to close in the 250,000 won range.

While individual investors net purchased nearly 4 trillion won in stocks, institutions and foreigners net sold 2.2 trillion won and 1.7 trillion won, respectively, dragging the index down.

The downturn is attributed to a combination of factors: the persistent 'semiconductor peak theory'—the belief that the memory industry has passed its peak due to slowing AI investment—and rising tensions between the U.S. and Iran over the weekend, which triggered a flood of profit-taking and risk-aversion selling.

[Seok Byoung-hoon / Professor of Economics, Ewha Womans University : "Until new evidence emerges that investment demand related to AI will continue to grow, it seems highly likely that we will see continued adjustments for the time being, driven by profit-taking and concerns that the market has peaked."]

Analysts also suggest that the volatility of leveraged products further amplified the decline, as single-stock leveraged products for Samsung Electronics and SK Hynix all hit record lows.

The total market capitalization of the domestic stock market, which had surpassed 8,000 trillion won last month to rank 6th globally, fell to the 6,000 trillion won range, dropping two spots to 8th in the world.

Reported by Shin Jin-soo | Video by Yoon Tae-ho | Graphics by Park Tae-young
※ Please note: This article was translated by AI and may contain errors.