Index retreats to 7,700s a day after biggest-ever single-day gain; sidecar triggered for fourth consecutive session amid extreme volatility; foreign investors net sell for 23rd straight session as institutions offload over 2 trillion won
The Kospi plunged 4.52 percent to the 7,700s on Wednesday, just one day after posting its biggest-ever single-session gain.
Heavy selling by foreign and institutional investors drove the decline, with a sidecar triggered for the fourth consecutive trading session on the main bourse as volatility surged to extreme levels. Mounting concerns over Middle East geopolitical tensions and a potential correction in US technology stocks further dampened investor sentiment.
The Kospi closed down 366.11 points, or 4.52 percent, at 7,730.82, according to Korea Exchange. The index opened 197.16 points, or 2.43 percent, lower at 7,899.77 and at one point fell as far as 7,541.11.
As losses deepened in the afternoon, a program sell-order sidecar — a temporary halt on sell-side program orders — was triggered on the Kospi market. The activation marked the third consecutive trading session with a sidecar on the main bourse, following a sell sidecar on Monday and a buy sidecar on Tuesday.
The Kospi swung sharply in both directions over recent sessions before Wednesday's renewed decline. The index fell 478.82 points, or 5.54 percent, on Friday, then plunged 676.18 points, or 8.29 percent, on Monday — the second-largest point drop in history. On Tuesday it surged 612.52 points, or 8.18 percent, setting a new record for the biggest single-day point gain, only to fall roughly 4.5 percent again on Wednesday.
Foreign and institutional investors were the primary drivers of the decline. Foreign investors net sold 2.8042 trillion won on the main bourse Wednesday, extending their selling streak to 23 consecutive trading sessions dating back to May 7. Institutions net sold an additional 2.2673 trillion won. Retail investors, by contrast, net bought 4.8611 trillion won, providing some support at the lower end of the index.
Wall Street closed mixed overnight as renewed attention fell on Middle East tensions and concerns about stretched valuations in AI-related technology stocks. The Dow Jones Industrial Average edged up 0.17 percent, while the S&P 500 and the Nasdaq Composite fell 0.26 percent and 0.97 percent, respectively.
AI-related uncertainty grew after data center developer Crusoe Energy Systems announced it had temporarily suspended development activities at the request of a major information technology client, apparently triggering profit-taking in technology stocks that had surged sharply in recent sessions.
Investor sentiment was also rattled by US President Donald Trump's claim that Iran had shot down a US Army Apache helicopter patrolling the Strait of Hormuz, with Trump signaling a strong response.
The domestic market opened lower and extended its losses through the close. Caution appeared to build as investors awaited the release of US consumer price index data for May. Some market analysts warned that the recent volatility could signal more than a short-term swing, suggesting the selloff may reflect a broader correction driven by fundamental concerns.
Samsung Electronics, the market's bellwether, closed down 6.06 percent at 302,500 won, barely holding the 300,000-won threshold. Its share price fell as low as 295,500 won intraday. SK Hynix, which had surged a record 15.91 percent on Tuesday, gave back 7.54 percent to close at 2,048,000 won, just above the 2,000,000-won level — though it dipped as low as 1,992,000 won during the session.
Among other large-cap stocks, SK Square, Samsung Electro-Mechanics, Hyundai Motor, LG Energy Solution and Samsung Life were among those that closed lower. HD Hyundai Heavy, Samsung Biologics and Hanwha Aerospace bucked the trend and finished higher.
The Kosdaq closed down 16.18 points, or 1.67 percent, at 951.63. The index opened 9.23 points, or 0.95 percent, lower at 958.58 and briefly turned positive early in the session before swinging back and forth and ultimately closing in the red. At its intraday low, the Kosdaq touched 932.27. On the secondary market, foreign investors and institutions net sold 7.2 billion won and 110.2 billion won, respectively, while retail investors net bought 116.7 billion won.
The won strengthened against the dollar but remained above the 1,500-won level. As of 3:30 p.m. in the Seoul foreign exchange market, the won traded at 1,512.1 won per dollar, 22.9 won stronger than the previous session's close.
th5@heraldcorp.com
