South Korea's stock market suffered "Black Thursday" with the two major indexes closing down more than 7%
Quick Look
- On October 15, the South Korean stock market fell sharply, with the KOSPI and KOSDAQ indexes both falling by more than 7% and triggering the circuit breaker mechanism.
- Continued net selling by foreign capital and weakness in the semiconductor sector are the main reasons.
- South Korea's Financial Commission said it will closely monitor the market and crack down on violations.
AI-generated summary
Why It Matters
South Korea's stock market has recently suffered continuous declines due to expectations of rising global interest rates and uncertainty in the semiconductor industry.
China News Service, Seoul, October 15 (Reporter Jin Xu) On the 15th local time, the South Korean stock market encountered "Black Thursday". The Korea Composite Stock Price Index (KOSPI) and the Kosdaq Index (KOSDAQ) fell sharply, once triggering the market circuit breaker mechanism, and both closed down by more than 7%.
KOSPI closed at 5554.22 points that day, down 454.59 points or 7.57% from the previous trading day. Since October 6, the KOSPI index has fallen for 7 consecutive trading days, with a cumulative decline of 1,449.52 points, a drop of 21%. KOSDAQ closed at 760.82 points, a drop of 7.65%.
According to Yonhap News Agency, South Korea's stock market fell rapidly shortly after the opening of the day. The two major markets, KOSPI and KOSDAQ, have successively launched the "temporary suspension" mechanism. Since then, both major indexes have fallen by more than 8% during the session, triggering market circuit breaker mechanisms and suspending trading for 20 minutes each.
According to reports, foreign investors were net sellers for eight consecutive trading days from October 2 to 15, and the continued selling further exacerbated the market decline. Affected by this, Samsung Electronics' stock price has plummeted 21.8% since October, and SK Hynix's stock price has plummeted 28.9%.
Some analysts believe that because market interest rates are at a high level and bond investments are becoming more attractive, global funds may reduce the allocation proportion of emerging market stocks and shift to the bond market. In addition, the recent financing bottleneck faced by investment in artificial intelligence infrastructure, as well as the continued weakness of U.S. technology stocks and semiconductor stocks, have combined to have an impact on the semiconductor sector of the Korean stock market.
The South Korean Financial Commission held a relevant meeting on the same day. Participants believed that factors such as expectations of a recent rise in global interest rates, uncertainty about investment and profit prospects in the artificial intelligence and semiconductor industries, and rising international oil prices have jointly exacerbated volatility in the Korean stock market. However, judging from the speed of stock price decline and the supply and demand of funds, there is also a certain degree of overreaction in the market.
South Korea's financial regulatory authorities and relevant agencies stated that they will closely monitor market trends, severely crack down on behaviors that disrupt market order such as spreading false rumors, manipulating stock prices, and illegal short selling, and actively prepare emergency plans.
Open Questions
- Will the subsequent selling pressure from foreign investors continue?
- What specific emergency plans will the Korean regulatory authorities adopt?
