Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
KOSPI tumbles back below 7,000 in 'Black Thursday' rout
The KOSPI index is displayed in the dealing room of Hana Bank in Seoul, Thursday. The benchmark index closed at 6,820.60, down 6.37 percent from the previous session. Yonhap
By Lee Yeon-woo
The KOSPI tumbled back below 7,000, Thursday, just one session after a sharp rebound, as concerns over slowing artificial intelligence (AI) infrastructure investment and intensifying competition in memory chips battered semiconductor shares.
The benchmark closed at 6,820.60, down 6.37 percent from the previous session. It opened 4.45 percent lower and extended its losses, falling as much as 7.6 percent to 6,730.87 intraday. A sell-side sidecar was activated at 9:10 a.m., marking the 19th such activation on the KOSPI this year.
Foreign investors sold a net 1.44 trillion won ($973.9 million) of shares, while institutional investors offloaded 1.39 trillion won. Retail investors, however, bought a net 2.78 trillion won.
Chipmakers led the retreat. SK hynix sank 11.53 percent to 1,842,000 won, while Samsung Electronics dropped 8.77 percent to 255,000 won.
The declines followed weakness in U.S. semiconductor shares overnight.
Morgan Stanley said cancellations and delays of data-center projects were becoming more widespread, citing postponement of a data-center development in Wyoming and a one-year moratorium on a new data-center construction in New York. The developments heightened concerns that investment in AI infrastructure could slow.
Investor sentiment was further weighed down after China's CXMT, the world's fourth-largest DRAM maker, began taking orders for an $8.55 billion initial public offering, raising concerns that competition in a memory chip market dominated by Samsung Electronics, SK hynix and Micron Technology could intensify.
SK hynix's American depositary receipts closed 9 percent lower at $176.46 overnight. Japan's Kioxia Holdings also tumbled more than 13 percent, as selling spread across the global semiconductor sector.
"Profit-taking after the previous day's sharp gains, combined with persistent doubts about the semiconductor sector, drove a steep decline in AI value-chain stocks," said Kang Jin-hyuk, an analyst at Shinhan Securities.
The Bank of Korea's first interest-rate increase in three and a half years had limited impact on equities as the move had largely been priced in. The central bank raised its benchmark rate by 0.25 percentage point to 2.75 percent from 2.50 percent on Thursday.
The secondary Kosdaq fell 4.53 percent to 791.84, breaking below 800. It opened 1.94 percent lower before extending its losses. A sell-side sidecar was activated at 10:20 a.m., marking the ninth such activation on the Kosdaq this year.
The won strengthened, with the won-dollar exchange rate closing at 1,480.4 won, down 4.3 won from the previous session.