Kospi Volatile on AI Credit Concerns, Closes Higher on SK Hynix Boost

The Kospi experienced severe volatility today (the 23rd), swinging between the 5,300 and 5,500 levels during trading hours.

Although the index managed to rebound thanks to positive momentum from SK Hynix regarding its suspension of Solidigm's IPO review, persistent jitters surrounding AI-related investment sentiment suggest that a turbulent market trend will likely continue for some time.

According to financial information provider Yonhap Infomax, the intraday trading range of the Kospi index was tallied at 244.32 points.

Just 10 minutes after the market opened, the Kospi plummeted 4.12% down to 5,305.98, marking its lowest level since July 29, when it hit 5,262.77.

However, as SK Hynix and Samsung Electronics successfully rebounded during the session, the index reversed direction, closing up 0.3% at its intraday high of 5,550.30.

The Kospi suffered a steep decline early in the session as overnight Wall Street slumped over fears that AI credit anxieties could spread to big tech.

Meta signaled its intent to increase AI investments while revealing third-quarter cash flow deterioration and plans to issue new shares for fundraising, fueling concerns over a capital bottleneck.

With investor sentiment sharply contracting, tech stocks tumbled significantly—including Nvidia (-4.4%), Micron (-6.3%), and Intel (-8.0%)—while the Nasdaq Composite plunged 2.6%, marking its largest drop since June.

Meta's 5-year credit default swap (CDS) premium surged by about 7 bps (1 bp = 0.01 percentage point) in a single day to hit an all-time high, compounding credit anxieties.

This implied that the market priced in a significant possibility of default risk for Meta.

Additional downward pressure came from Nvidia CEO Jensen Huang, who, while noting robust demand for AI infrastructure at the company's GTC developer conference, pointed out that "the issue is scarce capital."

The Kospi had already closed down more than 3% the previous day, reflecting concerns over Meta's capital-raising issues.

Given the market's semiconductor-heavy structure, which makes it more vulnerable to AI credit jitters, it appeared unable to avoid weakness early in the session.

However, SK Hynix's decision to suspend its review of Solidigm's IPO served as a savior.

After starting down 1.9% and briefly widening its losses to 4.3%, SK Hynix successfully bounced back during the session and closed with a 4.42% gain.

Samsung Electronics also turned upward right before the market closed, finishing up 0.47% to contribute to the index's rebound.

In particular, institutional investors drove the share price recovery by net-buying approximately 596.1 billion won worth of SK Hynix and 134.8 billion won of Samsung Electronics.

While the resolution of uncertainties surrounding Solidigm's IPO allowed the Kospi to bounce back, market volatility is expected to remain high for the time being as concerns surrounding investments in the AI value chain persist.

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