KOSPI briefly dips below the 4,900 mark
Sidecars triggered three times this week
"Stock market instability likely to continue next week as well"
Concerns over a slowdown in the macroeconomy and uncertainty surrounding the profitability of artificial intelligence (AI) weighed on the Korean stock market, which closed lower for the second consecutive day. With global risk appetite weakening, analysts said there was a lack of catalysts to revive semiconductor investment sentiment.
On the 6th, the KOSPI index closed at 5089.14, down 74.43 points (1.44%) from the previous trading day. After opening lower, the index plunged nearly 5% to as low as 4899.30 before paring some of its losses. Foreign investors led the decline by recording a net selling of 3.3268 trillion won, while institutions posted a net selling of 960.4 billion won. Individual investors recorded a net buying of 2.173 trillion won.
Dealers were working in the Hana Bank dealing room in Jung-gu, Seoul, on the 6th as the KOSPI index fell below the 5,000 mark intraday and a sell-sidecar was triggered for the first time in four days. Photo by Kang Jinhyung
The Korea Exchange also triggered a sell-sidecar on the stock market at 9:06 a.m. that day. A sell-sidecar is a mechanism under which, if the KOSPI 200 futures remain in a declining state for one minute, the effectiveness of sell program-trading orders is suspended for five minutes.
"Most foreign selling concentrated in the electrical and electronics sector"
Lim Jeongeun, a researcher at KB Securities, said, "The index closed lower for a second day as concerns over macroeconomic slowdown and AI profitability combined with a sharp drop in the prices of major assets such as silver and Bitcoin," adding, "The KOSPI has seen sidecars triggered three times just this week, resulting in a highly volatile market."
By sector, telecommunications (-4.75%), distribution (-3.77%), securities (-3.08%), and transportation equipment and parts (-3.07%) were weak. IT services (-2.38%), metals (-2.36%), textiles and apparel (-1.90%), electricity and gas (-1.89%), entertainment and culture (-1.88%), construction (-1.87%), and machinery and equipment (-1.83%) also closed lower.
Among large-cap stocks by market capitalization, KB Financial Group rose 7.03%, while Shinhan Financial Group (2.97%) and Celltrion (1.15%) also gained. In contrast, Samsung C&T (-5.39%), Hyundai Motor (-4.30%), Samsung Life Insurance (-3.86%), SK Square (-3.75%), Hanwha Aerospace (-3.75%), Hanwha Ocean (-3.69%), NAVER (-3.11%), Kia (-2.75%), and LG Energy Solution (-2.53%) closed lower.
Lim noted, "This week, foreigners recorded net selling of about 11 trillion won on the KOSPI, and roughly 10 trillion won of that was concentrated in the electrical and electronics sector," diagnosing that "Samsung Electronics and SK Hynix have also stepped out of their continuous upward trend and are taking a breather."
"Key U.S. data ahead... volatility likely to expand next week as well"
The KOSDAQ index closed at 1080.77, down 27.64 points (2.49%). Foreign investors recorded a net buying of 64.8 billion won, and individuals a net buying of 148.3 billion won. Institutions posted a net selling of 165.5 billion won.
Among top KOSDAQ stocks by market capitalization, Wonik IPS (6.77%), EO Technics (3.13%), HPSP (1.66%), and Pharmaresearch (1.04%) rose. However, most names declined, including Peptron (-9.67%), Rainbow Robotics (-7.45%), Ecopro (-6.99%), LegoChem Biosciences (-6.70%), Mezzion Pharma (-6.59%), Voronoi (-6.41%), Ecopro BM (-6.29%), Kolon TissueGene (-5.61%), Robotis (-5.54%), Caregen (-4.64%), ABL Bio (-4.57%), and Alteogen (-4.12%).
Lim said, "Next week, due to the release being delayed by the impact of the Shut Down (temporary suspension of government operations), U.S. January nonfarm payrolls and unemployment rate, along with the Consumer Price Index (CPI), will all be announced in the same week, which means instability in the stock market could persist."
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