As controversy over high valuations for artificial intelligence (AI) reignited, U.S. stocks plunged, and the domestic market took a direct hit. The KOSPI index tumbled as large-cap semiconductor stocks fell sharply. Although the U.S. federal government shutdown ended, analysis that the Federal Reserve (Fed) of the U.S. Central Bank could be forced to slow interest rate cuts also severely dented investor sentiment.
On the 14th, the KOSPI index closed at 4,011.57, down 159.06 points (3.81%) from the previous day. The KOSPI had risen for four straight sessions since on the 10th, but finished lower for the first time in five trading days.
The index plunged as foreigners and institutions dumped large volumes. In the main board, foreigners sold 2.855 trillion won worth, and institutions also sold 964 billion won. Only individuals bought a net 3.8045 trillion won of stocks.
Semiconductor heavyweights were particularly weak. SK hynix and Samsung Electronics plunged 8.50% and 5.45%, respectively. Doosan Enerbility also posted a decline in the 5% range. LG Energy Solution (-4.44%) and KB Financial Group (-3.00%), among others, fell.
By contrast, shipbuilding stocks surged after the announcement of the "joint fact sheet," the outcome of the South Korea–U.S. tariff and security talks. Expectations that cooperation between the two countries would expand in shipbuilding lifted shares. Sejin Heavy Industries (10.94%), HJ Shipbuilding & Construction (4.36%), Daehan Shipbuilding (4.31%), HD Hyundai Mipo (3.36%), and HD Hyundai Heavy Industries (3.17%) rose.
Lee Jae-won, a researcher at Shinhan Investment & Securities, said, "The KOSPI fell on controversy over high valuations for AI among large-cap semiconductor stocks," adding, "That said, with individual net buying flowing in whenever sell orders emerged, the 4,010 level of the index was supported as a lower bound."
The researcher said, "After confirming Nvidia's guidance, it may be possible to ease the AI bubble controversy, making Nvidia's earnings to be released on the 20th even more important."
The KOSDAQ index also fell back below the 900 level after three days. The KOSDAQ closed the day at 897.90, down 20.47 points (2.23%) from the previous trading day.
The KOSDAQ had extended gains for two straight trading days since on the 11th (closing 884.27), but lost steam on foreign and institutional selling. On the day, foreigners and institutions posted net sales of 345.3 billion won and 21.4 billion won, respectively, on the KOSDAQ market. Only individuals recorded net purchases of 380.6 billion won.
Among the top KOSDAQ market cap stocks, the moves were mixed. EcoPro BM, EcoPro, and Rainbow Robotics fell more than 5%, while Sam Chun Dang Pharm (-3.00%), HLB (-2.56%), and Peptron (-0.48%) also weakened.
Conversely, LigaChem Biosciences (4.53%), Alteogen (0.91%), and PharmaResearch (0.89%), among others, closed higher. In particular, ABL Bio, which announced news of a 22 billion won technology transfer deal with Eli Lilly, the world's largest pharmaceutical company, rose for a third straight trading day. It also gained more than 6% on the day.