KOSDAQ Drops Over 2%
Sharp Decline in Secondary Battery Stocks
On November 18, the KOSPI fell by more than 3%, dropping below the 4,000 mark. As uncertainty increased with the resurgence of negative sentiment toward artificial intelligence (AI) in the U.S. stock market the previous day, and as stock prices continued to plummet for several days, it appears that investors moved to realize their gains.
On this day, the KOSPI closed at 3,953.62, down 135.63 points (3.32%) from the previous session. The index opened at 4,044.47, down 44.78 points (1.10%), and continued to widen its losses, eventually falling below the 3,960 level.
Although individual investors made net purchases totaling 1.2426 trillion won in an attempt to support the index, foreign investors and institutions sold off 551.5 billion won and 676.8 billion won, respectively, dragging the index down.
On the 18th, a dealer is working in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. On that day, the KOSPI index closed at 3,953.62, down 135.63 points (3.32%) from the previous session, and the KOSDAQ index closed at 878.70, down 23.97 points (2.66%). Photo by Yonhap News Agency
By sector, shipbuilding, defense, holding companies, and retail (including apparel, department stores, food and beverage) rose. However, sectors that had previously led the KOSPI's gains-such as semiconductors, secondary batteries, automobiles, and securities-declined.
All of the top market capitalization stocks closed in negative territory. Among them, SK Hynix saw the steepest drop, falling 5.94% and losing the 600,000 won level.
Samsung Electronics (-2.78%), LG Energy Solution (-4.32%), Hyundai Motor (-2.58%), Doosan Enerbility (-4.31%), and Hanwha Aerospace (-5.92%) also declined.
With concerns about an AI bubble persisting, caution grew ahead of Nvidia's earnings announcement scheduled for November 19. As a result, all three major New York stock indexes fell overnight. Additionally, diminished expectations for a rate cut by the U.S. Federal Reserve are believed to have weighed on investor sentiment.
Han Jiyeong, a researcher at Kiwoom Securities, explained, "Given that the Nikkei index also plunged by 3%, this is not a domestic issue unique to Korea. The decline was influenced by the resurgence of negative news regarding AI stocks in the U.S. market the previous day, as well as policy uncertainty stemming from disagreements among Federal Reserve officials."
Han added, "Since November, the KOSPI has been fluctuating by about 100 points at a time, increasing investor fatigue due to frequent volatility. As a result, some investors moved to realize profits, particularly in markets like Korea and Japan, which had risen significantly."
The KOSDAQ also ended lower on the same day. The KOSDAQ closed at 878.70, down 23.97 points (2.66%) from the previous session, breaking below the 900 mark.
Among the top market capitalization stocks, most closed lower except for Alteogen (up 2.01%) and LIG ChemBio (up 0.73%). EcoPro BM (-6.09%) and EcoPro (-7.48%) experienced particularly steep declines.
Lee Jaewon, a researcher at Shinhan Investment Corp., explained, "The decline in expectations for a rate cut in December and negative news from U.S. big tech companies have weakened the AI value chain, including secondary batteries, robotics, and semiconductor materials and components. Amid this weakness in the AI value chain, the bio sector, which had shown strength due to rotational buying, is also facing downward pressure."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
