[Anchor]

The KOSPI, which seemed to have hit rock bottom and begun rebounding, suffered another sharp drop today (Oct. 20).

With concerns over artificial intelligence investments combining with political instability in Europe, investor sentiment appears to have withered. Reporter Kim Hye-min explores why the domestic stock market is uniquely vulnerable compared to other Asian markets.

[Reporter]

The KOSPI gave up all the gains it had made over the past two days.

At one point during the morning session, it plummeted 4.7%, temporarily breaking below the 5,500 mark.

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

SK Hynix plunged more than 7% at one point to fall to 1.183 million won. This marked the first time in about six months since last April that its trading price dropped below 1.2 million won.

Wall Street, which had rebounded last night on bargain hunting, saw its gains shrink late in the session as concerns over the profitability of AI investments resurfaced, and that fallout spilled over into the domestic market.

[Noh Dong-kil / Researcher, Shinhan Securities: Rather than there being a specific problem with the Korean market, it seems to be a phase of shedding concentrated weightings in semiconductors. During this phase, there needs to be a buyer to step in, but the supply-demand balance is somewhat vacant...]>

Adding to this, large-scale protests in France escalated into violence, causing French government bond yields to surge and triggering a rise in U.S. Treasury yields, which further dampened investor sentiment.

Major Asian stock markets, including those in Japan, Taiwan, and China's Hong Kong, also showed weakness, but none declined as steeply as 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 business is more diversified into home appliances and mobile devices.

[Lee Hyo-seop / 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 stock price declines.]

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

(Video edited by: Ahn Yeo-jin, Design by: Kim Min-young)