The KOSPI climbed intraday to the uncharted summit of 8,000 points on the 15th, but the joy didn't last. After hovering briefly at 8,000, the index quickly reversed lower and closed with a sharp drop. As overheating concerns mounted following the short-term surge, a wave of profit-taking by investors poured in, sending the index into a steep correction.
The Korea Exchange (KRX) prepared a ceremony when the KOSPI topped 8,000 points intraday. But when the index turned sharply lower, it canceled the event.
The KOSPI finished at 7,493.18, down 488.23 points (6.12%) from the previous session. Based on the closing price, the drop was the second largest on record by points since Mar. 4, when it fell 698.37 points.
The KOSPI opened slightly lower but sentiment was positive through early trading. The index reversed higher and, for the first time ever, broke through 8,000 points. It rose nearly 1% at one point to 8,046.78.
But after the index broke 8,000 points, heavy profit-taking orders poured in. Gains narrowed, and less than 30 minutes after crossing 8,000, the index turned lower. Sliding more than 7% intraday, it fell to as low as 7,371.68. As losses deepened, a "sell sidecar" was triggered on the Korea Exchange at 1:28 p.m.
Typically, when an index reaches a symbolic round number, many investors move to take profits. In addition, word spread in the morning that President Trump had made hard-line remarks on Iran, and investor sentiment weakened as the Samsung Electronics union, ahead of a general strike, said it would pursue "post-strike negotiations." On top of that, growing expectations for a rise in Japan's policy rate widened the index's losses.
Lee Kyung-min, a researcher at Daishin Securities, said, "As Japan's finance minister said the G7 meeting to be held on Jun. 15 will discuss the rise in global bond yields, caution over interest rates has expanded, sending market rates sharply higher."
Foreign investors were net sellers of more than 6.3 trillion won on the Korea Exchange. Institutions, including the national pension fund, also showed a selling bias of 2.2 trillion won. Only individuals were net buyers, at 8.2921 trillion won.
The semiconductor duo that had led the rally wobbled hard. Samsung Electronics, the top company by market cap, plunged 8.61% to finish transaction at 270,500 won. SK hynix also tumbled 7.66%. Hyundai Motor Group shares, which had rallied sharply this week, were weak as well.
Still, some large-cap artificial intelligence (AI) plays hit intraday record highs. LG Group shares continued to gain on expectations for its robotics business, with both LG Electronics and LG notching all-time highs. Samsung Electro-Mechanics also set an intraday record high.
Han Ji-young, a researcher at Kiwoom Securities, said, "The index surged from 7,000 to 8,000 points in just eight sessions," adding, "The unusually rapid pace of gains was a major reason for today's plunge." The researcher said, "In particular, during the index's sharp rise, concentration was extreme, with only two sectors—semiconductors and autos—outperforming the KOSPI."
By contrast, major Asian markets outside of Korea were relatively steady. Hong Kong's Hang Seng index and China's Shanghai Composite each fell in the 1% range, and Japan's Nikkei 225 slipped about 2%.
The KOSDAQ also fell more than 5%. The KOSDAQ finished at 1,129.82, down 61.27 points (5.14%) from the previous session.
Alteogen, which had reclaimed the No. 1 spot in KOSDAQ market capitalization the previous day after winning a patent dispute, fell 4.16%. EcoPro BM (8.85%), EcoPro (9.21%) and LEENO Industrial (11.56%)—other large-cap names—also saw major swings.