The South Korean stock market faced a "Black Thursday" as the U.S. semiconductor stocks plummeted. The KOSPI index dropped below 8,000 at the opening and fell to the 7,600 range, while the KOSDAQ also sank to the 860 level. Both the KOSPI and KOSDAQ markets experienced extreme volatility, triggering sell-side circuit breakers during trading hours.
On July 2, the Korea Exchange reported that the KOSPI closed at 7,648.09, down 655.32 points (7.89%) from the previous trading day. The index opened at 7,933.10, down 370.31 points (4.46%), immediately losing the 8,000 mark.
In the early trading session, a sharp decline in KOSPI 200 futures led to the activation of a sell-side circuit breaker at 9:07 a.m. The KOSPI briefly recovered to 8,136.28 but faced renewed selling pressure in the afternoon, dropping to 7,616.33 and breaking below the 7,700 level.
By investor type, individuals purchased a net 6.25 trillion won, engaging in bargain hunting, while foreign and institutional investors sold a net 4.37 trillion won and 2.07 trillion won, respectively, contributing to the index's decline. Notably, foreign investors continued their selling streak for the tenth consecutive trading day.
Among the top market capitalization stocks, semiconductor shares were hit hard. Samsung Electronics fell 9.06%, and SK Hynix dropped 14.57%. Other significant declines included SK Square (-13.20%), Samsung Electro-Mechanics (-12.65%), Samsung Electronics Preferred (-7.73%), Samsung C&T (-6.34%), Samsung Life (-4.26%), and HD Hyundai Heavy Industries (-4.07%). In contrast, LG Energy Solution (1.72%) and Samsung Biologics (0.72%) closed higher.
The KOSDAQ also finished lower, closing at 866.72, down 62.63 points (6.74%) from the previous day. The index opened at 904.53, down 24.82 points (2.67%), and fell to 863.74 during trading. A sell-side circuit breaker was triggered in the KOSDAQ market at 12:47 p.m.
In the KOSDAQ, individuals bought a net 535.8 billion won, while foreign and institutional investors sold a net 195.7 billion won and 357.5 billion won, respectively.
Most of the top KOSDAQ stocks also showed weakness, with declines including Alteogen (-1.82%), EcoPro BM (-5.43%), EcoPro (-6.56%), Juseong Engineering (-5.99%), Rainbow Robotics (-6.55%), Kolon TissueGene (-6.34%), Wonik IPS (-20.53%), HLB (-5.68%), Rino Industrial (-8.08%), and ABL Bio (-4.43%).
Analysts noted that news of Meta's entry into the cloud infrastructure business raised concerns about a slowdown in AI investment cycles, leading to a global drop in semiconductor stocks that directly impacted the domestic market.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The news that Meta is pursuing a cloud business utilizing surplus AI computing resources has highlighted concerns about a slowdown in semiconductor demand due to the AI data center investment cycle, triggering sell-side circuit breakers in both the KOSPI and KOSDAQ. Additionally, reports that Apple is negotiating supply deals with Chinese memory firms have heightened fears of a slowdown in memory price increases, putting downward pressure on the semiconductor sector overall."
He added, "However, it remains to be seen whether these issues will actually lead to a decline in memory demand, so it is necessary to assess the semiconductor industry and profitability through Samsung Electronics' preliminary earnings announcement scheduled for July 7."
Lim Jeong-eun, a researcher at KB Securities, noted, "Of the 4.4 trillion won in net selling by foreign investors in the KOSPI, 3.5 trillion won was concentrated in the electronics sector. While there was a surge of selling in the semiconductor and IT hardware sectors, there was a rotation into non-AI sectors such as banking, cosmetics, and defense."
Meanwhile, in the Seoul foreign exchange market, the weekly closing rate for the won against the dollar was recorded at 1,555.8 won, up 0.9 won from the previous trading day.
* This article has been translated by AI.
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