The KOSPI index fell more than 4% as weakness in major semiconductor stocks dragged it below the 6,500 mark. The KOSDAQ also dropped over 5%, prompting the activation of sell sidecars in both markets, which increased market volatility.
On July 20, the Korea Exchange reported that the KOSPI closed at 6,516.27, down 304.33 points (4.46%) from the previous trading day. The index opened at 6,643.58, down 2.60%, and continued to decline throughout the session.
In the securities market, institutions sold a net 920.3 billion won, contributing to the index's drop. In contrast, foreign and individual investors bought a net 516.1 billion won and 349.5 billion won, respectively.
As market volatility increased, the KOSPI market activated its 20th sell sidecar of the year at 11:21 a.m. The sell sidecar is triggered when the price of the most traded futures contract based on the KOSPI 200 falls by more than 5% for one minute.
Major stocks generally showed weakness. Samsung Electronics closed at 244,000 won, down 11,000 won (4.31%). SK Hynix ended at 176,400 won, down 7,800 won (4.24%).
Hyundai Motor closed at 399,000 won, down 26,000 won (6.12%), while Samsung Electro-Mechanics fell by 2,000 won (0.16%) to 127,500 won. Conversely, Samsung Electro-Mechanics preferred shares rose by 54,900 won (29.82%) to close at 239,000 won.
The KOSDAQ index closed at 749.64, down 42.20 points (5.33%). In the KOSDAQ market, individual investors bought a net 190.7 billion won, while foreign and institutional investors sold a net 57.7 billion won and 134.8 billion won, respectively.
The KOSDAQ also activated its 10th sell sidecar of the year at 10:52 a.m. This was triggered when the most recent KOSDAQ 150 futures contract fell by more than 6% and the KOSDAQ 150 index dropped by over 3% for one minute.
Most of the top market capitalization stocks in the KOSDAQ also declined. Alteogen closed at 269,500 won, down 7,000 won (2.53%). Ecopro BM fell by 8,300 won (7.38%) to 104,100 won, and Ecopro dropped by 6,500 won (8.12%) to 73,500 won.
JUSUNG Engineering fell by 10.64%, and Rainbow Robotics dropped by 5.54%. Wonik IPS plummeted by 18.19%, while Peptron fell by 12.59%. In contrast, Samsung SDI preferred shares surged by 29.82%, nearing the upper limit. Lino Industry fell by 4.43%, and Kolon TissueGene dropped by 1.45%.
Lee Kyung-min, a researcher at Daishin Securities, explained, "The domestic stock market reflected the accumulated semiconductor-related bad news during the holiday period and the military conflict risks between the U.S. and Iran, leading to the decline."
He added, "Concerns over a slowdown in AI infrastructure and semiconductor demand were highlighted again with the release of a new model by China's Moonshot AI, coupled with rising tensions in the Middle East and inflation fears due to high oil prices, which dampened investor sentiment."
* This article has been translated by AI.
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