Low-priced buying could not prevent panic selling. After initially rising in early trading, the KOSPI fell back into a sell-off, dropping below 7,200 in the afternoon. The KOSDAQ also fell below 800 for the first time since September of last year, prompting simultaneous sell-side circuit breakers in both markets.
On July 8, the Korea Exchange reported that the KOSPI closed at 7,246.79, down 409.52 points (5.35%) from the previous trading day. The index started the day at 7,452.48 and briefly rose to 7,791.66 due to low-priced buying, but selling pressure increased in the afternoon, causing it to drop to 7,186.21, reflecting extreme volatility.
The KOSDAQ also closed down 46.23 points (5.56%) at 785.00. This marks the first time the KOSDAQ has closed below 800 since September 3 of last year.
As volatility increased during the trading session, both markets triggered sell-side circuit breakers. The Korea Exchange activated the sell-side circuit breaker for the KOSPI at 1:31 PM, followed by the KOSDAQ at 1:33 PM.
Recently, the stock market has been experiencing a rollercoaster effect. The KOSPI plummeted 7.89% on July 2, rebounded 5.76% on July 3, but then fell again by 4.91% and 5.35% on July 7 and 8, respectively. Compared to the closing price on July 1 (8,303.41), the index has dropped 1,056.62 points (12.73%) in just five trading days.
Market dynamics showed a different pattern compared to the previous day. In the KOSPI market, foreign investors net bought 474.2 billion won, while individuals and institutions sold 394.1 billion won and 135.7 billion won, respectively. In the KOSDAQ market, foreign investors net bought 337 billion won, while individuals and institutions sold 197 billion won and 137.5 billion won, respectively. The previous day, foreign and institutional investors had sold 2.9 trillion won and 308.8 billion won in the KOSPI market, leading to the index's sharp decline.
Analysts attribute the recent market turmoil to deteriorating investor sentiment in the semiconductor sector and escalating geopolitical risks in the Middle East. Following Samsung Electronics' preliminary earnings announcement, concerns about the memory market persisted, while military tensions between Iran and the United States intensified, leading to rising international oil prices and U.S. Treasury yields, which heightened risk-averse sentiment.
Lee Kyung-min, a researcher at Daishin Securities, stated, "Investor sentiment in the semiconductor sector has weakened following Samsung Electronics' earnings announcement, and the military conflict in the Middle East has led to rising international oil prices and Treasury yields, significantly reducing the preference for risk assets. Concerns about the semiconductor market and geopolitical risks are simultaneously increasing market volatility."
Most of the top market capitalization stocks saw significant declines. Samsung Electronics fell 6.25%, while SK Hynix dropped 5.68%, SK Square 6.34%, Samsung Electro-Mechanics 10.25%, LG Energy Solution 4.97%, Hyundai Motor 3.55%, Samsung Life Insurance 7.73%, Samsung C&T 6.95%, and Samsung Biologics 4.15% all showed weakness.
Kang Jin-hyuk, a researcher at Shinhan Investment Corp., noted, "The current market is in a phase where fundamentals and investor sentiment are at odds. Recent extreme volatility has led to a mindset where even good news is interpreted as bad news, but the KOSPI's valuation has dropped to its lowest level since the financial crisis, making the recovery of investor sentiment crucial going forward."
* This article has been translated by AI.
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