The Kospi is displayed at Hana Bank's dealing room in Jung-gu, Seoul, on Wednesday, after the benchmark closed down 360.42 points, or 5.98 percent, at 5,663.24. The won-dollar exchange rate stood at 1,446.7 won as of 3:30 p.m., down 15.8 won, while the Kosdaq fell 43.17 points, or 6.12 percent, to close at 662.68. [Yonhap]
The Kospi is displayed at Hana Bank's dealing room in Jung-gu, Seoul, on Wednesday, after the benchmark closed down 360.42 points, or 5.98 percent, at 5,663.24. The won-dollar exchange rate stood at 1,446.7 won as of 3:30 p.m., down 15.8 won, while the Kosdaq fell 43.17 points, or 6.12 percent, to close at 662.68. [Yonhap]

The Kospi tumbled more than 5 percent Wednesday, sliding to the 5,600 range as sell sidecars and circuit breakers were triggered across both the Kospi and Kosdaq markets for a second consecutive day — the first time in history that circuit breakers have been activated on both markets on back-to-back trading days.

The Kospi closed down 360.42 points, or 5.98 percent, at 5,663.24, extending a sharp two-day losing streak after plunging more than 10 percent on Tuesday.

The index opened up 65.45 points, or 1.09 percent, at 6,089.11 and briefly climbed as high as 6,228.52, a gain of 3.40 percent, as buyers attempted a rebound in early trade. However, the index surrendered all of its gains, reversed course and at one point fell as low as 5,262.77 during the session.

On the main Kospi market, retail investors and foreign investors net sold 1.97 trillion won ($1.34 billion) and 1.23 trillion won, respectively, dragging the index lower. Institutional investors net purchased 3.16 trillion won.

Top-cap semiconductor stocks also tumbled across the board. Samsung Electronics closed down 5.23 percent at 200,850 won, falling below the 210,000-won level, while SK hynix plunged 9.61 percent to close at 1.4 million won.

SK hynix earlier Wednesday disclosed preliminary results showing its second-quarter consolidated operating profit surged 557.2 percent year-on-year to 60.54 trillion won, with sales rising 256.8 percent over the same period last year to 79.32 trillion won.

However, the results fell short of market expectations, and the earnings call offered no specifics on shareholder return policies — a combination analysts said sharply dampened investor sentiment.

Target-price cuts followed. Mirae Asset Securities said in a report Wednesday that it had lowered its target prices for Samsung Electronics and SK hynix by 33 percent each, to 370,000 won and 2.8 million won, respectively.

BNK Investment Securities also cut its target price for SK hynix, lowering it from 1.85 million won to 1.48 million won. "Companies' aggressive capacity expansion stance is unlikely to change easily, and demand is expected to continue slowing in the second half of the year, which will limit any rebound in share prices," said Lee Min-hee, an analyst at BNK Investment Securities.

Han Ji-young, an analyst at Kiwoom Securities, said Wednesday's crash was not a normal market move. "The essence of the plunge is that expectations of a rebound after Tuesday's 10 percent drop have retreated, causing most shareholders to lock in losses and triggering panic selling," Han said.

Other large-cap stocks also fell sharply, with SK Square dropping 8.11 percent, Samsung Electro-Mechanics falling 7.63 percent and Samsung Biologics declining 4.52 percent.

The Kosdaq closed down 43.17 points, or 6.12 percent, at 662.68.

On the Kosdaq market, retail investors net sold 457.8 billion won. Foreign and institutional investors net purchased 308.3 billion won and 147.1 billion won, respectively, but their buying was not enough to stem the decline.

Among top Kosdaq-listed stocks by market capitalization, Ecopro BM fell 9.04 percent, Jusung Engineering dropped 9.86 percent and Ecopro declined 7.29 percent.

On the upside, Rainbow Robotics rose 2.50 percent, HLB gained 2.50 percent and PharmaResearch advanced 4.13 percent.


moon@heraldcorp.com