The stock market plunged in early trading, falling below 5,000 points. As fears emerged in the United States that artificial intelligence (AI) could encroach on industries across the board, including software, not only blue-chip semiconductor stocks but also industrials, which had recently surged, crashed together. With KOSPI200 futures also plunging in tandem, a "sell-sidecar" was triggered on the Korea Exchange in early trading.
On the 6th, the KOSPI started trading at 5,013.15, down 150.42 points (2.91%) from the previous session, but the losses quickly deepened, giving up 5,000 points. As of 9:20 a.m., the decline widened to around 5%, threatening even the 4,900 level.
The futures market is also being decimated. As KOSPI200 futures fell more than 5% from the previous day for one minute, a sell-sidecar was triggered, suspending the validity of sell quotations for program trading for five minutes.
Foreign investors are net sellers in both the cash and futures markets. In particular, they are unloading large net positions in IT names such as Samsung Electronics and SK hynix, which they had been buying.
With U.S. stocks falling across the board overnight, investor sentiment toward the domestic market was severely dampened. As concerns mounted over AI-related capital expenditure burdens and the fear that Generative AI would replace the software sector, declines continued, led by growth stocks.
Weak U.S. employment data also acted as a headwind for stocks. With the disposition of Kevin Warsh, nominated as the next chair to lead the Federal Reserve, not yet clearly understood, the release of weak jobs data added to confusion among investors.
As uncertainty grew in global financial markets, a wave of forced selling emerged in the domestic market. Losses are especially large in stocks that had surged. Samsung Electronics and SK hynix are plunging nearly 5%, while Hyundai Motor is down more than 7%.
Hanwha Aerospace is seeing steep losses, and SK Telecom and SeAH Besteel Holdings are also in a nosedive. In contrast, KB Financial is rising alone on expectations of increased dividends.
The KOSDAQ is also in a steep slide. It opened at 1,077.08, down 31.33 points (2.83%) on the day, but the early-session losses widened to more than 5%.