KOSPI crashes nearly 10 pc in S. Korea on massive tech sell-offs
Seoul, June 23
South Korean stocks tumbled nearly 10 per cent on Tuesday as foreign investors dumped major semiconductor shares and other market heavyweights amid profit-taking, tracking overnight losses in US technology stocks. The local currency weakened against the US dollar.
After choppy trading, the benchmark Korea Composite Stock Price Index (KOSPI) plunged 910.71 points, or 9.99 percent, to close at 8,203.84. The index hit an intra-day high of 9,175.45, reports Yonhap news agency.
The Korea Exchange (KRX), the bourse operator, activated a circuit breaker at around 2:33 p.m. after the KOSPI plummeted more than 8 percent from the previous session's close.
It marked the fourth time this year and the 10th time on record that the KRX has halted trading of all stocks for 20 minutes.
Trade volume was heavy at 483.7 million shares worth 59.9 trillion won (US$38.9 billion) with losers outnumbering winners 856 to 46.
Foreign and institutional investors sold a net 4.13 trillion won and 4.55 trillion won, respectively. Meanwhile, retail investors were net buyers, purchasing 8.58 trillion won alone.
Overnight, U.S. Vice President JD Vance said a "very good foundation" had been established for negotiations toward a final agreement with Iran, while mediators also reported progress in the talks.
Despite the diplomatic developments, U.S. stocks closed mixed, with the tech-heavy Nasdaq Composite falling 1.3 percent amid renewed concerns over major technology companies.
Shares of SpaceX tumbled more than 16 percent after reports that the company is selling bonds as part of a major fundraising effort to support its artificial intelligence initiatives.
"Valuation concerns have grown for major South Korean semiconductor stocks after they repeatedly hit record highs in a short period, prompting heavy selling by foreign investors and increasing market volatility," said Seo Sang-young, an analyst at Mirae Asset Securities.
Seo added the almost 1 percent decline in Nasdaq futures further dampened investor sentiment toward domestic chipmakers.
In Seoul, most large-cap shares ended in negative territory. Chipmakers Samsung Electronics and SK hynix tumbled 12.31 percent to 310,000 won and 12.47 percent to 2.55 million won, respectively. Top carmaker Hyundai Motor decreased 12.05 percent to 511,000 won, and leading battery maker LG Energy Solution dipped 6.1 percent to 362,000 won.
The Korean won was quoted at 1,539.1 won per U.S. dollar as of 3:30 p.m., down 2.1 won from the previous session.
— IANS
Reader Comments
Interesting how retail investors in Korea jumped in and bought the dip while institutions sold off. Reminds me of Indian retail investors during the 2020 crash. But 10% in a single day? That's brutal. Hope our own markets are more stable this year. 🙏
Circuit breakers activating 4 times this year in Korea is alarming. India has similar mechanisms, but we haven't seen such extreme moves recently. The global tech bubble bursting is very real. Time for Indian investors to diversify beyond IT stocks and gold. 🧐
Let's not forget, Korea's economy is heavily dependent on chip exports. A crash like this could affect their GDP growth. India should watch and learn - over-reliance on any single sector is risky. We need to build a more balanced tech ecosystem. 🤔
The SpaceX bond news triggering a sell-off in Korea shows how interconnected our markets are. Even a minor US headline can cause chaos elsewhere. For Indian retail investors, this is a reminder to keep a long-term view and not panic sell during corrections. 📉📈
Honestly, 10% in a day sounds terrifying, but sometimes these corrections are healthy. Valuations had gone insane. If India's Nifty follows suit, I won't be surprised. The only saving grace is that domestic inflows in India are strong. Let's see how the week unfolds. 🏦
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