The Kospi opened strongly Wednesday but reversed course during trading, with losses deepening rapidly. Following Tuesday's sharp selloff, the domestic market tumbled again, triggering sell-side program trading halts — known as sell-side sidecars — on both the Kospi and Kosdaq for a second consecutive session.
According to Korea Exchange, the Kospi stood at 5,655.71 as of 11:39 a.m. Wednesday, down 367.95 points, or 6.11 percent, from Tuesday. The index broke below the 6,000 level during trading, with losses continuing to widen.
The index had opened up 65.45 points, or 1.09 percent, at 6,089.11, briefly recovering as high as 6,228.52 — a gain of 3.40 percent — in early trading. It subsequently gave back all gains and turned negative.
A sell-side sidecar was triggered on the Kospi at 10:55:07 a.m., followed by one on the Kosdaq at 10:56:07 a.m. The back-to-back activations came after both markets had already seen sell-side sidecars triggered on Tuesday.
Retail investors, who had been net buyers for three consecutive sessions through Tuesday, turned to net selling Wednesday. Retail investors currently show net selling of 1.77 trillion won ($1.21 billion) on the Kospi, while foreign investors are also net sellers at 140.7 billion won. Institutional investors, meanwhile, are net buyers at 1.85 trillion won.
After Samsung Electronics and SK Hynix tumbled 13 to 14 percent on the domestic market Tuesday, weakness in the semiconductor sector carried over into overnight trading on Wall Street. The tech-heavy NASDAQ Composite closed down 0.22 percent from the previous session.
Semiconductor-related stocks fell sharply, with Micron dropping 8.85 percent, AMD falling 8.15 percent, Intel losing 5.86 percent, Qualcomm declining 4.21 percent and Western Digital sliding 6.91 percent.
The Philadelphia Semiconductor Index tumbled 4.49 percent, extending its losing streak to four consecutive sessions. SK Hynix's American depositary receipt also fell 8.98 percent, marking a third straight session of sharp declines and leaving the ADR roughly 13 percent below its offering price of $149.
A decline in international oil prices helped improve investor sentiment somewhat, allowing the Dow Jones Industrial Average and the S&P 500 to rise 1.03 percent and 0.21 percent, respectively.
Against this backdrop, the domestic market opened higher Wednesday on bargain-hunting following Tuesday's steep losses, but reversed during trading amid lingering concerns over the semiconductor sector.
Investors were particularly divided over SK Hynix's second-quarter earnings, which were released before the market opened.
SK Hynix disclosed that its preliminary second-quarter operating profit came in at 60.54 trillion won, a 557.2 percent increase from the same period last year. The figure fell 4.7 percent short of the market consensus of 63.55 trillion won compiled by Yonhap Infomax. Sales for the same period reached 79.32 trillion won, up 256.8 percent year on year.
SK Hynix said it expects memory chip demand growth to continue, as major technology companies are expanding investment in AI infrastructure and fielding additional supply requests — investment driven by revenue generated from AI services.
SK Hynix shares were down 9.7 percent from the previous session at 1.4 million won. The stock had opened up more than 1 percent but reversed during trading and is rapidly deepening its losses. Samsung Electronics was also down 5.4 percent, trading at 208,000 won, after briefly surging as high as 234,000 won — a gain of 6.36 percent — intraday before tumbling.
Kim Seok-hwan, a researcher at Mirae Asset Securities, described the domestic market's performance as a "disappointing rebound," saying SK Hynix missed market expectations on sales, operating profit and operating margin alike in the previous quarter.
Kang Jin-hyeok, a researcher at Shinhan Investment, said the market decline was driven by a combination of factors, including a renewed rebound in international oil prices following Iran's airstrike and US and Saudi strikes on the Islamic Revolutionary Guard Corps, as well as SK Hynix's earnings falling short of market expectations. He added that disappointment selling emerged after the earnings call, which lacked any announcement on shareholder returns.
Among other large-cap stocks, SK Square fell 10.0 percent, Samsung Electro-Mechanics dropped 8.8 percent, Hyundai Motor lost 1.6 percent, LG Energy Solution declined 3.9 percent and Samsung Biologics slid 4.5 percent.
At the same time, the Kosdaq fell 49.17 points, or 6.97 percent, to 656.68. The index had opened up 7.86 points, or 1.11 percent, at 713.71 but reversed course and is currently trading below the 700 level.
yuni@heraldcorp.com
