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U.S. editionYonhap reported that on the 22nd the KOSPI opened down 1.14% at 5,670.11 and closed down a sharp 3.5%. The close was 5,533.77. Yonhap, SBS and Korea Economic Daily reported that the Kosdaq also fell 3.6%. Korea Economic Daily reported that Samsung Electronics and SK Hynix led the decline. Bloomberg TV reported that Asian tech stocks fell across the board and that Brent crude topped
The two chip stocks carry a large weight in the KOSPI, so when expectations for U.S. AI investment waver, the whole index moves sharply. A surge in oil prices pushes up import prices, weighing on corporate earnings and on the interest-rate path at the same time.
Your pension and fund returns may swing widely this week. If you hold leveraged products, it is worth checking that a one-day drop is magnified to more than double.
Guests on Sampro TV said a supply-demand gap, rather than earnings, widened the drop, and saw the chip price correction as nearing its end. The brokerage view reported by Korea Economic Daily also said Samjeon-Nix has entered bottoming territory and hoped for a W-shaped rebound.
Bloomberg TV reported that Meta’s investment expansion and Tesla’s investment cut pulled in opposite directions and revived anxiety over AI trades. Ken Griffin of Citadel said AI is almost certainly a bubble right now.
What is confirmed is the 3.5% one-day fall and the fact that chips led it. The size of foreign selling and the response of pension funds have not yet been tallied. Today we watch the Nasdaq after the U.S. close and foreign flows right after the open.
Yonhap (KOSPI close, Oct 22) · SBS (Kosdaq 3.6%, Oct 22) · Korea Economic Daily (Samjeon-Nix decline, Oct 22) · Bloomberg TV (Asian stocks and oil prices, Oct 22)
KOSPI plunges 3.5% to close at 5,533.77… Kosdaq also down 3.6%
A day after a rebound, another drop of more than 3%, with Samsung Electronics and SK Hynix dragging the index down
Yonhap reported that the KOSPI opened on the 22nd down 1.14% at 5,670.11, widened its losses in the afternoon and ended the regular session down a sharp 3.5%. The close tallied by the Korea Exchange is 5,533.77. Korea Economic Daily reported that as the index slid toward the 5,600 level during the session, Samsung Electronics and SK Hynix, known together as ‘Samjeon-Nix,’ led the decline, and Yonhap, SBS and Korea Economic Daily all reported that the Kosdaq also fell 3.6%. A drop of more than 3% is not a first for the KOSPI this month. SBS Biz reported that on the 12th the index also fell 3.65% to close at 6,384, which means the index level has dropped by more than 800 points in ten days. That morning the Bank of Korea’s Monetary Policy Board held the base rate at 3.00%, and Governor Shin Hyun-song’s press conference followed in the afternoon.
Overseas factors piled on. Bloomberg TV reported that Asian stocks fell across the board the same day, led by tech shares, and that Chinese stocks fell by the most since the so-called ‘Liberation Day.’ Bloomberg also reported that as attacks by Yemen’s Houthi rebels on Saudi Arabia continue, the United States has ordered some diplomats to leave Saudi Arabia and Brent crude has topped $110 a barrel. In the U.S., earnings reports showed Meta raising its AI investment outlook and Tesla cutting its capital spending outlook. In its closing broadcast the same day, Sampro TV’s ‘Closing Bell Live’ diagnosed a ‘supply-demand gap,’ rather than earnings, as what widened the drop. Governor Shin said at the press conference that “consumption is temporarily reduced by stock-price adjustments,” Yonhap and Korea Economic Daily reported.