South Korea halts trading as KOSPI plunges 8%
What's the story
South Korea's benchmark KOSPI index witnessed a massive fall of nearly 8% on Thursday, prompting an automatic trading halt. The decline was largely attributed to a tech-led selloff in the US market amid persistent inflation concerns. Major companies such as Samsung Electronics and SK Hynix saw significant declines as foreign investors ramped up their sell-offs, highlighting a broader market struggle.
Market performance
KOSPI records longest losing streak since September 2024
The KOSPI index, which tracks South Korea's top companies, fell by 7.7% to 5,548.78 on Thursday.
This marks its seventh consecutive session of losses, the longest losing streak since September 2024.
The decline was triggered by a sharp drop in index futures and prompted an automatic five-minute suspension on program sell orders as part of an abrupt cooling mechanism for the market downturn.
Corporate impact
Tech giants face major decline
The market downturn had a major impact on tech giants and battery makers. Samsung Electronics' shares fell by 9.05% while SK Hynix's shares fell by 11.06%. Battery maker LG Energy Solution's shares also slid down by 3.44%.
Despite the current volatility, Mixo Das, head of Korea equity strategy at J.P.Morgan in Hong Kong, remains optimistic about AI stocks over a six- to 12-month period, expecting them to be substantially higher than their current levels.
Market dynamics
Foreign investors were net sellers
Out of 889 issues traded, only 90 shares advanced while a whopping 768 declined.
Foreign investors were net sellers of shares worth 355.6 billion won.
Despite the market turmoil, the South Korean won strengthened slightly against the US dollar on the onshore settlement platform.
It was quoted at 1,339.5 per dollar on Thursday morning, up from its previous close at 1,342.3 per dollar.