The KOSPI index, which had been on the verge of 8,000 points, closed lower, putting the brakes on a five-session rally. Some analysts said Deputy Minister Kim Yong-beom's proposal of a "national dividend" to return the excess profits of Korea's economy in the age of artificial intelligence (AI) to all citizens gave bears an excuse to sell.
On the 12th, the KOSPI index finished trading at 7,643.13, down 179.11 points (2.29%) from the previous session. The KOSPI opened at 7,953.41, up 131.17 points (1.68%). As it surged more than 2% early in the session, the index climbed to 7,999.67 points. Expectations grew that the KOSPI would reach 8,000 points for the first time ever.
But the mood shifted sharply as time passed. The index's gains narrowed, and after 10 a.m., it turned lower, then fell more than 5%, sliding to the 7,420 level.
Among investors, some said the KOSPI's intraday plunge was driven by debate over Deputy Minister Kim Yong-beom's so-called "AI national dividend" proposal.
In a Facebook post that day, Kim said, "The fruits of the AI infrastructure era are not the result of specific corporations alone," arguing that a so-called "national dividend" system should be designed to pay part of corporations' excess profits to the public. Kim noted, "The boom has emerged on an industrial base that all citizens have built together over half a century," adding, "Part of those fruits should be structurally returned to the people."
Bloomberg said Kim's proposal triggered the stock sell-off. As calls grew to redistribute corporations' profits from the expansion of the AI industry to society, investors worried about policy fallout and were thrown into confusion.
Kim later explained that the idea was "not to impose a new windfall tax on corporate profits, but to use the naturally increased excess tax revenue from the AI boom." Investor sentiment then showed some stabilization. Still, the market failed to rebound.
Foreign investors were net sellers of more than 5.4 trillion won on the Korea Exchange. Institutions, including pension funds, also had a net selling advantage of 1.1 trillion won. Only individuals were net buyers of more than 6.6 trillion won.
Most large-cap stocks by market value ended lower. Samsung Electronics and SK hynix, which had been strong early on, fell more than 2%, and Hyundai Motor Group shares that had supported the index's rise also turned weak.
Secondary battery stocks, including LG Energy Solution, and securities shares also fell across the board. In contrast, LG Electronics surged sharply as the competitiveness of its physical AI business drew attention.
The KOSDAQ index also fell more than 2%. The KOSPI index finished trading at 1,179.29, down 28.05 points (2.32%) from the previous session. Biotech was strong, but secondary battery and semiconductor sectors declined.