The KOSPI index dropped more than 5%, falling below the 6500 mark. The decline was driven by a broad sell-off in semiconductor stocks, which had recently led the market's gains, as foreign and institutional investors engaged in significant selling, causing the index to fall over 6% at one point during the trading session. The KOSDAQ index managed to reduce some of its losses, closing around the 820 level.
On August 19, the Korea Exchange reported that the KOSPI closed at 6471.17, down 398.66 points (5.80%) from the previous trading day.
The index opened at 6528.77, down 341.06 points (4.96%), and continued to widen its losses. At one point, it fell to 6400.81, marking a 6.83% drop, before slightly recovering but ultimately failing to regain the 6500 level by the end of the session.
As the market continued to decline early in the session, a sell-side circuit breaker was triggered at 9:06:02 AM, marking the 25th such occurrence in the securities market this year.
The sharp decline in the stock market was primarily attributed to the recent downturn in semiconductor stocks. On the previous day, U.S. markets saw significant drops in memory-related stocks, including Micron (-6.9%), SanDisk (-9.0%), and Western Digital (-7.4%), leading to profit-taking in domestic semiconductor stocks.
Analysts noted that the recent strong performance of global memory stocks had created a significant pullback pressure. In Japan, Kioxia also experienced a 12.60% drop, reflecting a broader weakness in global memory stocks.
Additionally, high U.S. long-term interest rates and geopolitical uncertainties in the Middle East dampened investor sentiment. The yields on 10-year and 30-year U.S. Treasury bonds remained elevated at 4.69% and 5.27%, respectively. Tensions in the Middle East escalated after Iran's parliamentary speaker stated that the country would maintain the closure of the Strait of Hormuz until promises made in a tentative agreement with the U.S. were fulfilled, alongside reports of airstrikes in the region.
On this day, individual investors made net purchases of 5.5617 trillion won, engaging in bargain hunting. In contrast, foreign and institutional investors sold a net 3.8188 trillion won and 1.9043 trillion won, respectively, leading the index's decline.
Among the top market capitalization stocks, Samsung Electronics (-7.82%), SK Hynix (-9.75%), SK Square (-11.54%), Samsung Electro-Mechanics (-3.68%), Hyundai Motor (-4.83%), KB Financial (-1.25%), and Samsung C&T (-5.96%) all saw declines. Conversely, LG Energy Solution (1.85%), Samsung Biologics (0.85%), and Hanwha Aerospace (2.71%) recorded gains.
The KOSDAQ index closed at 824.46, down 9.74 points (1.17%) from the previous trading day.
In the KOSDAQ market, foreign and institutional investors made net purchases of 48.1 billion won and 45.7 billion won, respectively, while individual investors sold a net 102.1 billion won.
Among the top KOSDAQ stocks, EcoPro (-1.03%), Rainbow Robotics (-1.60%), JUSUNG Engineering (-4.29%), HLB (-2.43%), and Wonik IPS (-2.76%) closed lower. In contrast, Alteogen (1.85%), EcoPro BM (0.64%), Rino Technology (0.15%), IOTech (0.24%), and Peptron (3.28%) finished higher.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The domestic stock market experienced a sharp decline due to the turnaround of foreign investors to net selling and the exit of institutional funds. The sell-side circuit breaker was triggered, and a pullback was observed, particularly in the semiconductor sector, which had recently led the market's sharp rebound." He added, "Profit-taking in memory-related stocks such as Micron, SanDisk, and Western Digital was also seen in the U.S. market, and major semiconductor stocks like Samsung Electronics and SK Hynix showed weakness domestically. Geopolitical tensions in the Middle East and high market interest rates also contributed to the dampened investor sentiment."
* This article has been translated by AI.
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