234.64P Drop from Closing Price... Largest Ever Decline
Sidecar and Circuit Breaker Triggered Simultaneously
Foreigners Net Sell 1.5 Trillion Won... Samsung Electronics Down 10%
The domestic stock market plunged into panic as skepticism about U.S. artificial intelligence (AI) stocks coincided with concerns over a U.S. economic slowdown. The KOSPI index fell more than 230 points at the close, setting a record for the largest drop ever. As the index declined, the KOSPI market capitalization also shrank below 2,000 trillion won.
According to the Korea Exchange on the 5th, the KOSPI index closed at 2,441.55, down 234.64 points (8.77%) from the previous day. This is the largest drop ever at the close. Market capitalization also fell below 2,000 trillion won to 1,997.745 trillion won.
The index started the day down over 2%, and the decline widened during the session as selling pressure intensified, mainly from foreign investors. On that day, 10 stocks rose while 924 stocks fell.
By investor type, foreigners sold a net 1.5283 trillion won, institutions sold 270.7 billion won, and individuals bought 1.6968 trillion won. In program trading, both arbitrage and non-arbitrage trades were net sellers, recording a total net sale of 462.3 billion won.
All sectors declined. Medical precision and machinery fell more than 11%, while chemicals, steel and metals, textiles and apparel, electrical and electronics, transportation equipment, and manufacturing dropped 9-10%. Construction, non-metallic minerals, finance, transportation and warehousing, and services showed weakness in the 8% range.
Top market cap stocks were also wiped out. Samsung Electronics (-10.30%), SK Hynix (-9.87%), LG Energy Solution (-4.17%), Samsung Biologics (-2.31%), Hyundai Motor (-8.20%), Samsung Electronics Preferred (-9.52%), Celltrion (-5.73%), Kia (-10.08%), KB Financial (-7.69%), and Shinhan Financial Group (-7.53%) all closed lower.
Meanwhile, the KOSDAQ index closed at 691.28, down 88.05 points (11.30%) from the previous session. The index started down about 1% and widened its losses during the session. On that day, 23 stocks rose while 1,633 stocks fell.
In the KOSDAQ market, individuals sold 677.9 billion won, while foreigners and institutions bought 547.2 billion won and 117.2 billion won, respectively.
During the session, for the first time since the COVID-19 pandemic, both the sidecar and circuit breaker (CB) were triggered simultaneously in the KOSDAQ and KOSPI markets. The sidecar was triggered in the morning session, and the CB was triggered in the afternoon session.
No Geun-chang, head of the Research Center at Hyundai Motor Securities, said, "The index plunged as the possibility of a U.S. recession, defects and potential delays in Nvidia Blackwell chips, and instability in the Middle East overlapped. However, the gradual interest rate cuts expected to be implemented twice within this year will act as a positive factor for the stock market."
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