AI bubble fears spark 2 trillion won foreign sell-off

Samsung Electronics, SK hynix fall over 4%; Kosdaq drops 4.8%

Market demands proof of semiconductor cycle durability, HBM edge

A display board at Hana Bank's headquarters in Jung-gu, Seoul, shows the Kospi and other market indicators Monday. The Kospi closed down 241.69 points, or 3.65 percent, at 6,384.24 — its steepest single-day decline since Sept. 2, when it fell 3.99 percent. The Kosdaq ended down 43.08 points, or 4.83 percent, at 849.19. [Yonhap]
A display board at Hana Bank's headquarters in Jung-gu, Seoul, shows the Kospi and other market indicators Monday. The Kospi closed down 241.69 points, or 3.65 percent, at 6,384.24 — its steepest single-day decline since Sept. 2, when it fell 3.99 percent. The Kosdaq ended down 43.08 points, or 4.83 percent, at 849.19. [Yonhap]

The Kospi shed more than 3 percent Monday, breaking below the 6,400 level as foreign investors offloaded more than 2 trillion won ($1.49 billion) in shares and heavyweight semiconductor stocks tumbled. Investor sentiment soured amid lingering concerns over AI investment sparked by bubble warnings tied to OpenAI, with markets demanding further confirmation of the semiconductor super-cycle's staying power and South Korean chipmakers' competitiveness in high-bandwidth memory.

According to Korea Exchange, the Kospi closed down 241.69 points, or 3.65 percent, at 6,384.24. The index opened at 6,578.17 before extending losses to an intraday low of 6,368.49. Foreign investors net sold 2.02 trillion won in shares, while institutions offloaded an additional 110.7 billion won. Individual investors net bought 1.47 trillion won, and other corporate entities purchased 661.8 billion won.

Most large-cap stocks by market capitalization fell on the day. Samsung Electronics closed down 4.39 percent at 250,500 won, while SK hynix dropped 4.52 percent to finish at 1.6 million won.

Samsung Electronics preferred shares fell 3.71 percent, SK Square dropped 6.29 percent and Samsung Electro-Mechanics declined 3.82 percent. LG Energy Solution, Hyundai Motor, Samsung Biologics and Samsung Life Insurance also fell, by 0.75 percent, 1.39 percent, 1.48 percent and 0.56 percent, respectively. KB Financial Group ended flat.

The Kosdaq also closed lower, falling 43.08 points, or 4.83 percent, to 849.19. The decline was the steepest since July 29, when the index dropped 6.12 percent — a span of roughly two and a half months.

Institutions led the Kosdaq selloff, net selling 222.8 billion won. Foreign investors, who had unloaded more than 2 trillion won on the main board, net sold only 28.3 billion won on the Kosdaq. Individual investors net bought 248.8 billion won.

Industry analysts said the index's failure to rebound even after Samsung Electronics reported strong third-quarter earnings pointed to the need for fresh catalysts to reset the market's elevated expectations for the semiconductor sector.

"Further verification is needed on shifts in global asset allocation, the relative valuation of Korean semiconductor stocks, and diverging expectations for future earnings growth," said Lee Jae-won, an analyst at Yuanta Securities Korea.

In the near term, US inflation data are expected to be a key variable for investor sentiment. "US September consumer price index and producer price index readings would need to come in below market expectations for any meaningful turnaround in sentiment," said Kim Dae-jun, an analyst at Korea Investment Securities. "Until those figures are confirmed, range-bound trading is unavoidable."


kacew@heraldcorp.com