On the 21st, the KOSPI index plunged more than 3%, sliding to the 3,850 level. Just a day after Nvidia released strong results, the artificial intelligence (AI) bubble argument resurfaced, and the U.S. stock market tumbled following "hawkish (currency tightening preference)" remarks by U.S. Federal Reserve (Fed) officials.
The KOSPI index ended the session at 3,853.26, down 151.59 points (3.79%) from the previous day. The KOSPI index fell below the 3,900 level for the first time in a month since on Oct. 23 (3,845.56).
The index dropped sharply as foreigners went on large-scale "sell" orders. In the Korea Exchange, foreigners posted a net sale of 2.8231 trillion won. Individuals and institutions bought a net 2.2954 trillion won and 495.6 billion won, respectively, but it was not enough to defend the index.
Overnight in the U.S. stock market, the AI bubble narrative was reignited. Experts pointed to a surge in Nvidia's accounts receivable, with analysis saying it was similar to the dot-com bubble era. Semiconductor stocks fell across the U.S. market, and domestic semiconductor-related shares also dropped sharply.
"Hawkish remarks" by Fed members also stoked concerns about an AI bubble. Fed Governor Lisa Cook said in a public speech at Georgetown University's McDonough School of Business in Washington, D.C., on the 20th (local time), "I get the impression that the likelihood of a decline in highly valued asset prices has increased."
Lee Jae-won, a Shinhan Investment & Securities researcher, said, "The U.S. stock market widened losses as it focused on concerns over Nvidia's surge in accounts receivable and the hawkish remarks by Fed Commissioners," adding, "The KOSPI also fell in tandem as foreign funds flowed out of large-cap semiconductor stocks amid the U.S. market's decline."
The decline in semiconductor stocks stood out. Samsung Electronics plunged 5.77%, and SK hynix tumbled 8.76%. Semiconductor materials, parts, and equipment names such as HANMI Semiconductor (2.75%) and ISU PETASYS (8.4%) also fell. Power supply corporations such as Cheil Electric (5.38%), HD Hyundai Electric (7.85%), and Gaon Cable (4.82%) also declined.
Among other large-cap stocks by market capitalization, Doosan Enerbility (5.92%), HD Hyundai Heavy Industries (4.8%), Hanwha Aerospace (5.13%), LG Energy Solution (3.51%), KB Financial Group (0.58%), and Hyundai Motor (0.95%) also fell one after another.
The KOSDAQ index also plunged more than 3%. The KOSDAQ finished the day at 863.95, down 27.99 points (3.14%) from the prior trading day. On the day, foreigners and institutions were net sellers on the KOSDAQ market by 127.1 billion won and 79.1 billion won, respectively. Only individuals bought 219.9 billion won.
Blue lights lit up across the top KOSDAQ market cap names. Alteogen (2.87%), EcoPro (5.17%), EcoPro BM (4.82%), Peptron (4.40%), Rainbow Robotics (6.52%), HLB (3.13%), and PharmaResearch (3.35%) fell. Some pharmaceutical stocks, such as LigaChem Biosciences (0.34%) and ABL Bio (0.85%), rose slightly.