The Kospi fell back in a single day today (the 22nd), retreating to the 5,500 level. Notably, Samsung Electronics and SK Hynix both plummeted 4% to 5% side by side in the first trading session held after their massive treasury stock purchases came to an end.

The Kospi finished the session down 201.89 points, or 3.53%, at 5,533.77 compared to the previous day. The index started 65.55 points lower at 5,670.11 and briefly attempted a turnaround by gaining 0.08% during the morning, but subsequently plunged steeply, dropping as low as 5,485.98.

Looking at market supply and demand, foreign investors oscillated between net buying and net selling before ending the session with a slight buying advantage, though the scale was limited to 59 billion won. Individuals also net bought 381 billion won, while institutions net sold 463 billion won. In the Kospi 200 futures market, foreigners net bought 493 billion won, whereas institutions and individuals net sold 133.5 billion won and 261 billion won, respectively.

As of 3:30 p.m. today, the won-dollar exchange rate in the Seoul foreign exchange market stood at 1,324.2 won per dollar, down 1.0 won from the previous session.

Despite overnight gains on Wall Street and consecutive strong earnings reports from major U.S. large-cap companies, downward pressure intensified in the domestic stock market due to a combination of factors: profit-taking following yesterday's surge, the conclusion of treasury stock purchases by Samsung Electronics and SK Hynix, persistent doubts over AI infrastructure investments, and growing concerns over worsening conditions in the Middle East.

Lee Kyungmin, a researcher at Daishin Securities, analyzed, "The Kospi failed to sustain its rebound despite Meta's strong earnings and shifted back to a downturn. While the growth of Meta's artificial intelligence agent 'Muse' and the performance of its advertising system were positive, free cash flow recorded a deficit due to massive capital expenditures, leaving the need to verify investment profitability persistent." He added, "Tesla also saw its capital expenditures for the third quarter decrease compared to the previous quarter, highlighting doubts over investment sustainability. Ultimately, it is judged that the earnings of Meta and Tesla failed to provide a sense of relief to the market."

Meta announced early this morning Korea time that its revenue for the third quarter of this year increased 26% compared to the same period last year, reaching $64.6 billion. This exceeded market expectations. However, its third-quarter free cash flow turned into a deficit of negative $2.12 billion.

Heightened tensions in the Middle East may have also acted as an additional burden on investor sentiment. This followed reports from the New York Times that the U.S. and Israel are formulating specific military operations to strike Iran again after the U.S. midterm elections on the 3rd of next month, while stepping up training including drill flights using fighter jets over Iraqi airspace, along with successive news that the U.S. is preparing to order the evacuation of embassy staff in other Middle Eastern countries besides Saudi Arabia.

As of this writing, Nasdaq 100 futures are trading down around 1.5%. International crude oil prices, which are sensitive to Middle Eastern geopolitics, saw front-month West Texas Intermediate (WTI) crude futures for December delivery rise by more than 2%.

Consequently, the domestic stock market fell despite increases across all three major Wall Street indices. Overnight on Wall Street, the Dow Jones Industrial Average and the S&P 500 rose 0.69% and 0.58%, respectively, while the tech-heavy Nasdaq Composite Index gained 1.05%.

Meanwhile, the Bank of Korea kept its base rate frozen at 3.00%, as expected by the market.

In the securities market today, Samsung Electronics plummeted 4.03% and SK Hynix dropped 5.49%. Samsung Electronics' stock buyback for executive and employee stock compensation wrapped up earlier this month, while SK Hynix's 40 trillion won treasury stock purchase and cancellation concluded yesterday. With both corporations, which were recent heavyweights driving the Kospi, ending their share buybacks, the lack of entities to absorb selling pressure is cited as one of the reasons behind today's sharp decline.

Among other large-cap stocks, the majority declined, including SK Square, LG Energy Solution, Samsung Electro-Mechanics, Samsung Biologics, and Hyundai Motor. By sector, almost all industries fell except for general services, non-metals, construction, and banking. In particular, sharp drops were prominent in medical/precision instruments, chemicals, electrical/electronics, and manufacturing.

The Kosdaq closed down 28.66 points, or 3.61%, at 764.10. The index started 2.92 points lower at 789.84 and dipped as low as 761.56 at one point. Foreigners and institutions recorded net sales of 122 billion won and 100 billion won, respectively, while individuals posted a net purchase of 221 billion won.

Looking at top market-cap stocks, secondary battery and semiconductor-related shares such as EcoPro, EcoPro BM, Jusung Engineering, Wonik IPS, and PSK dropped sharply. Pharmaceutical stocks like Alteogen, HLB, and Samchundang Pharm also showed weakness.

Trading values for the Kospi and Kosdaq markets today were tallied at 13.7 trillion won and 6.408 trillion won, respectively. Trading values for the pre-market and main market of the alternative trading system Nextrade totaled 6.6945 trillion won.

(Photo: Yonhap News)