Overflow of Semiconductor Sell-offs... KOSPI Closes Down 27.55P

Due to disappointment over the earnings announcement of Nvidia, the 'leader in artificial intelligence (AI) semiconductors,' the domestic stock market closed lower on the 29th, driven by selling pressure centered on semiconductor stocks.

On that day, the KOSPI closed at 2662.28, down 27.55 points (1.02%) from the previous trading day. The index opened at 2657.18, down 32.65 points (1.21%), and failed to make a meaningful rebound. Individual investors bought stocks worth 626.3 billion KRW alone, but foreigners and institutions sold stocks worth 422 billion KRW and 266.9 billion KRW, respectively.

Among the top market capitalization stocks, LG Energy Solution (6.11%), Samsung SDI (5.60%), LG Chem (2.23%), Kia (1.91%), POSCO Holdings (1.78%), and KB Financial Group (1.28%) closed higher. On the other hand, SK Hynix (-5.35%), Samsung Biologics (-3.53%), Samsung Electronics (-3.14%), Samsung Electronics Preferred (-2.75%), Hyundai Mobis (-2.01%), Celltrion (-1.24%), and HD Hyundai Heavy Industries (-1.15%) fell. The decline was significant for SK Hynix, which supplies high-bandwidth memory (HBM) to Nvidia.

By sector, steel and metals (1.20%), chemicals (0.43%), distribution (0.41%), services (0.31%), and securities (0.20%) rose. Conversely, medical precision (-4.37%), machinery (-3.49%), food and beverages (-2.38%), pharmaceuticals (-2.00%), electrical and electronics (-1.91%), transportation and warehousing (-1.55%), and manufacturing (-1.41%) sectors declined.

Hana Bank Headquarters Dealing Room, Jung-gu, Seoul. Photo by Yongjun Cho jun21@

The KOSDAQ index closed at 756.04, down 6.46 points (0.85%) from the previous session. The index opened at 756.33, down 6.17 points (0.81%), and widened its losses. Foreigners and institutions net sold stocks worth 53.4 billion KRW and 116.5 billion KRW, respectively. Individuals net bought stocks worth 195 billion KRW.

Among the top market capitalization stocks, EcoPro BM (2.06%), HLB (2.04%), Enchem (1.66%), and EcoPro (1.43%) rose. Meanwhile, Silicon Two (-6.75%), Soulbrain (-3.81%), HPSP (-3.52%), Pearl Abyss (-2.88%), EO Technics (-2.78%), Lino Industrial (-2.66%), ST Pharm (-2.34%), and Celltrion Pharm (-2.32%) closed lower.

Ji-won Kim and Jeong-eun Lim, researchers at KB Securities, said, "Reflecting disappointment over Nvidia's earnings, both the KOSPI and KOSDAQ markets fell by around 1%. Selling pressure on semiconductor stocks intensified amid simultaneous net selling by foreigners and institutions. Most of the foreigners' net selling in the KOSPI, approximately 420 billion KRW, was concentrated in the electrical and electronics sector (about 380 billion KRW)."

They added, "As a result, buying interest shifted to secondary battery-related stocks, and with renewed value-up momentum, some automobile and financial stocks also attracted buying interest."

Regarding Nvidia's stock price decline, they analyzed, "Although Nvidia announced earnings that exceeded expectations and a large-scale share buyback, it showed a sharp drop in after-hours trading. Disappointment over the third-quarter outlook for this year and concerns about delays in the production of the latest AI chip, Blackwell, were highlighted. Market expectations were also too high." On the 28th (local time), Nvidia fell 2.1% during regular trading and continued to decline by about 7% in after-hours trading.