The KOSPI barely held the 5,000 mark, but the index still plunged more than 4%. Foreign investors dumped 3.8 trillion won in a day, dragging the index down. Analysts said that despite U.S.-driven optimism about an end to the war, uncertainty over the domestic market's fundamentals grew, sapping momentum for a rebound.
On the 31st, the KOSPI closed at 5,052.46, down 224.84 points, or 4.26%, from the previous day.
Starting at 5,143.75, down 133.55 points, or 2.53%, from the prior trading day, the KOSPI tumbled more than 4% in the morning, breaking below the 5,100 level. It then pared losses and climbed to the 5,190 level, but ultimately could not withstand the foreign investors' dumping.
Foreign investors extended trillion-won-scale dumping in the KOSPI market for a ninth straight day. In the main board that day, foreigners were net sellers of more than 3.8 trillion won. Individuals and institutions bought more than 2.4 trillion won and 1 trillion won, respectively, but it was not enough.
Despite early signals from the United States for an end to the war, the Korean stock market was cool. The Wall Street Journal reported that U.S. President Donald Trump told aides he is willing to end the war even without reopening the Strait of Hormuz. Trump also said on his social media (SNS) that the United States would leave Iran within six weeks of the war's start.
In fact, unlike international oil prices easing and Japanese (down 1.58%) and Greater China markets trimming losses and finding stability, only the KOSPI continued a plunge of more than 4%, showing a stark contrast.
Lee Kyung-min, a researcher at Daishin Securities, said, "The possibility of ending the war is positive for the stock market, but there are also concerns that a new risk could form if the expense of the war is shifted to Asia."
If the United States withdraws without lifting the blockade of the Strait of Hormuz, concerns are emerging that Asia, which relies heavily on Gulf energy, will face heavier burdens as Iran asserts control over the strait and begins collecting transit fees. In fact, even though the global dollar index turned lower, the won-dollar exchange rate broke through 1,530 won during the session, showing an independent weakening.
On top of that, a recurrence of the "TurboQuant shock" sent Samsung Electronics and SK hynix sharply lower. TurboQuant, released by Google Research, is a technology that can cut memory usage to about one-sixth. Analysts said it could affect artificial intelligence (AI) investment and demand for memory semiconductors.
Initially, the prevailing view was that the impact of TurboQuant would be temporary, but overnight in the U.S. market Micron and SanDisk plunged 9.88% and 7.04%, respectively. The Philadelphia Semiconductor Index, composed of AI and chip-related stocks, tumbled 4.23%, with all 30 of its components closing lower.
Meanwhile, LG Energy Solution climbed to No. 3 in market capitalization on the main board, overtaking Hyundai Motor, as solid domestic electric-vehicle sales in February and the rising importance of energy storage systems (ESS) from the Middle East came to the fore.
The KOSDAQ ended at 1,052.39, down 4.94% (54.66 points) from the prior day. In the KOSDAQ market, foreigners were net buyers of 113 billion won and individuals 49.9 billion won. Institutions were net sellers of 68.7 billion won. The move is seen as stemming from broad weakness in biotech shares centered on Sam Chun Dang Pharm, the KOSDAQ's No. 1 by market cap.
Sam Chun Dang Pharm had surged on expectations for developing generic drugs for obesity and diabetes. The stock plunged as the contract size announced the prior day fell short of market expectations and profit-taking hit the market.