Most KOSPI large-cap stocks plunged as weakness in U.S. semiconductor shares coincided with consecutive net selling by foreign and institutional investors. Nine out of the top 10 stocks by market capitalization declined, with the exception of Hyundai Motor.

Contraction in Investment Sentiment Driven by Semiconductors Is the Main Cause of the Decline

The core backdrop of this decline is weakness in U.S. semiconductor stocks. The rapid growth of China's CXMT dampened investor sentiment regarding the memory semiconductor industry cycle, and the impact quickly spread across domestic semiconductor large-cap stocks in general.

In addition, foreign investors continued net selling for several consecutive trading days and institutions also showed selling dominance, increasing downward pressure on the index. Concerns spread beyond bellwether stocks such as Samsung Electronics and SK Hynix to the broader semiconductor value chain, including Samsung Electro-Mechanics and SK Square.

Stock-by-Stock Fluctuations… SK Hynix Posts Largest Drop at -7.87%

Among the top 10 stocks by market capitalization, SK Hynix recorded the steepest decline at -7.87%. This was followed by SK Square (-6.81%) and Samsung Electro-Mechanics (-6.10%), which also fell sharply. Samsung Life Insurance (-5.44%), Samsung Biologics (-3.36%), Samsung Electronics (-3.18%), LG Energy Solution (-2.71%), and Samsung Electronics Preferred (-2.28%) also showed weakness together, while KB Financial Group remained roughly flat at -0.06%.

Meanwhile, Hyundai Motor rose +0.27%, the only stock to turn positive. Since this correction was centered on semiconductors, the automotive sector appears to have remained relatively outside the scope of impact.

Underlying Reasons for Decline Vary by Stock

SK Hynix and Samsung Electronics appear to have reacted most sensitively to concerns about the memory semiconductor business conditions ahead of their quarterly earnings announcements. SK Square, as a holding company with a stake in SK Hynix, moved in tandem with Hynix's share price trend, and Samsung Electro-Mechanics showed concurrent weakness due to its connection to semiconductor component demand.

LG Energy Solution, a secondary battery stock, also failed to escape the impact of contracting investment sentiment driven by semiconductors on this day. Samsung Biologics, Samsung Life Insurance, and KB Financial Group have limited direct ties to semiconductors, but declined together amid broad-based selling pressure across the index.

Key Variables Ahead: Earnings Season and FOMC

The quarterly earnings releases of SK Hynix and Samsung Electronics, followed by the earnings of major U.S. big tech companies, are cited as key variables that will determine the future market direction. While strong earnings from semiconductor companies could serve as a catalyst for improving investment sentiment, some observers note that they could also trigger profit-taking.

Furthermore, the outcome of the U.S. Federal Open Market Committee (FOMC) meeting and whether foreign and institutional selling trends persist are additional factors that need to be closely monitored.

[This article is not intended to recommend the purchase or sale of any specific stock. Stock prices can fluctuate rapidly depending on corporate performance, supply and demand, and market conditions, and investment decisions and responsibilities rest solely with the investor. Intraday stock prices and fluctuation rates included in the article may vary depending on the time of writing. This article was written with AI assistance.]