KOSPI Plummets Over 3% After Brief Rebound: What Happened?

[Anchor]

The KOSPI, which seemed to have bottomed out and staged a rebound, suffered a sharp plunge once again. The downturn appears to be driven by renewed doubts over artificial intelligence profitability, coupled with violent unrest in France and soaring U.S. Treasury yields, which heavily weighed on investor sentiment.

Reporter Kim Hye-min has the details.

[Reporter]

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

At one point during the morning session, the index tumbled 4.7%, briefly falling below the 5,500 threshold.

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 by over 7% at one point to drop to 1,183,000 won. It marked the first time in about six months since April that the stock fell below the 1,200,000 won mark during intraday trading.

[Noh Dong-gil / Researcher, Shinhan Securities: Rather than there being a specific problem with the South Korean stock market, it appears to be a phase of unwinding concentrated weightings in semiconductors. There needs to be a market participant to step in and buy during this phase, but the supply-demand balance is somewhat vacant.]

Compounding the pressure, massive protests in France escalated into violent unrest, causing French government bond yields to spike and triggering a rise in U.S. Treasury yields, which further dampened investor sentiment.

Major Asian stock markets, including those in Japan, Taiwan, and Hong Kong, also showed weakness, but none as severely as the KOSPI.

Analysts point out that the South Korean 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-seop / Head of Financial Industry Research, Korea Capital Market Institute: As ChangXin Memory's technological gap closes rapidly and supply expands quickly, 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, making their stock price declines relatively milder.]

With the KOSPI plunging more than 20% from its peak this month, forced liquidation of retail investors' holdings 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.